EU Launches Investigations into Apple, Google, Amazon, and Meta for Digital Markets Act Violations

European antitrust regulators have initiated investigations into tech giants Apple, Alphabet’s Google, Amazon, and Meta Platforms for potential breaches of the EU’s new Digital Markets Act, a move that could result in significant fines for the companies, Reuters news report said.
Margrethe VestagerThe investigations as part of the Digital Markets Act, which came into effect on March 7, aim to curb the dominance of major tech firms by facilitating user transitions between competing online services, such as social media platforms, internet browsers, and app stores. By fostering greater competition, the legislation seeks to create opportunities for smaller companies to thrive in the digital ecosystem.

“We suspect that the suggested solutions put forward by these companies do not fully comply with the DMA. We will investigate the companies’ compliance with the DMA, to ensure open and contestable digital markets in Europe,” Executive Vice-President Margrethe Vestager in charge of competition policy said.

Violations of the Digital Markets Act could incur fines of up to 10 percent of the companies’ global annual turnover, signaling potential financial repercussions for the tech giants.

Simultaneously, U.S. antitrust regulators have intensified their scrutiny of Big Tech, investigating alleged anti-competitive practices, which could potentially lead to the companies being dismantled.

While tech firms assert that they have mobilized significant resources to comply with the Digital Markets Act’s requirements, European Commission officials expressed concerns about the adequacy of the measures undertaken. Specifically, regulators question whether Apple facilitates easy uninstallation of software applications on its iOS operating system, allows users to alter default settings, and provides choice screens for selecting rival browsers or search engines on iPhones.

Additionally, regulators are examining whether Apple engages in “steering” practices that restrict app developers from informing users about alternative offers outside its App Store.

Responding to the investigations, Apple expressed confidence in its compliance with the Digital Markets Act, highlighting its responsiveness to feedback from the Commission and developers.

Regulators scrutinize Alphabet, particularly its treatment of search engines like Google Shopping, Google Flights, and Google Hotels, assessing whether the company prioritizes its services over competitors and discriminates against third-party services in search results.

The Commission further criticized Apple and Alphabet for recent fee structures that appear to contravene the Digital Markets Act’s requirement for “free of charge” services. Meta Platforms, formerly known as Facebook, faced scrutiny over its introduction of a subscription service without ads in Europe, prompting calls for free alternative options.

In response, Meta defended its subscription model, stating that it aligns with regulatory obligations, including those outlined in the Digital Markets Act.

Google asserted that it has made significant changes to its services and vowed to defend its approach in the forthcoming months.

The Commission is taking steps to gather facts to clarify whether Amazon’s treatment of its own brand products on the Amazon Store, and Apple’s new fee structure and other terms and conditions for alternative app stores and distribution of apps from the web (sideloading), are DMA compliant.

The investigations signal the European Union’s commitment to enforcing regulatory frameworks aimed at fostering fair competition in the digital landscape, amid growing concerns about the dominance of tech behemoths and their impact on market dynamics.

Baburajan Kizhakedath