Apple, Google, Meta suspected of breaching DMA compliance by EU
Not even three weeks after the European Union’s Digital Markets Act (DMA) came into force, the European Commission (EC) revealed Monday that it is currently investigating three of the six major tech companies – Apple, Google and Meta – for potential violations of the regulations.
Apple must demonstrate that its app store alterations and the ease with which users can change default settings meet the DMA’s standards.
Similarly, Google’s app store policies and any potential unfair practices favoring its own services, such as Google Shopping and Hotels, in search results are under scrutiny.
Meta’s “Subscription for No Ads” feature, which allows Facebook and Instagram users to pay a fee to opt out of personalized ad targeting, may not align with the DMA.
The model might be considered non-compliant even with Meta’s recent offer to reduce these fees by almost half.
Thierry Breton, the EC’s commissioner for the internal market, emphasized: “The DMA clearly states that gatekeepers must seek users’ consent to utilize their personal data across various services, and this consent must be freely given.”
The EC has initiated five investigations: two involving Apple, two involving Google and one involving Meta.
Antitrust chief Margrethe Vestager stated that the proposed solutions put forward by the three companies are suspected to fall short of full compliance with the DMA, prompting the order for companies to retain crucial documents for the probe.
The investigations by the EC are anticipated to conclude within a year.
Non-compliant tech firms risk fines of up to 10% of their global turnover. Repeat violations could lead to fines escalating to 20%.
Furthermore, in systematic breaches, the Commission may enforce additional measures, such as mandating a gatekeeper to divest a business segment or prohibiting the gatekeeper from acquiring additional services linked to non-compliance.
In addition to investigating Apple, Google and Meta, the EC will review Apple’s fee structure for app store alternatives and issue retention orders to Amazon and Microsoft.
ByteDance remains the sole gatekeeper to avoid being subject to investigatory actions as the EU endeavors to enforce the DMA’s stringent guidelines.
“These are the instances where we already have tangible evidence of potential non-compliance. This will be within less than 20 days of the DMA’s implementation. However, our monitoring and investigative efforts do not stop here. We may soon need to initiate other non-compliance cases,” Breton highlighted.
Apple and Google app stores probed
Both Google and Apple have released statements defending their current strategies for DMA compliance.
“To adhere to the Digital Markets Act, we have implemented significant changes to how our services operate in Europe,” pledging to “continue defending our approach in the upcoming months,” Google’s competition director Oliver Bethell assured.
“We are confident that our plan aligns with the DMA, and we will continue to engage constructively with the European Commission during their investigations,” Apple’s spokesperson affirmed.
“Apple teams have introduced various new developer capabilities, features, and tools to comply with the regulation. Simultaneously, we have implemented safeguards to mitigate new risks to the privacy, quality, and security of our EU users’ experience.
Throughout this process, we have shown flexibility and responsiveness to the European Commission and developers, listening to and incorporating their feedback,” the spokesperson added.
A Meta representative stated Meta has designed the Subscription for No Ads feature to address various regulatory obligations, including the DMA, ensuring compliance while arguing that subscriptions as an alternative to advertising are a well-established business model across multiple industries.
Meta ‘forced’ users to ‘pay or consent’ to share data
The EC’s announcement followed the submission of DMA compliance reports by all designated gatekeepers and the organization of public workshops to discuss DMA compliance.
These workshops are set to conclude tomorrow with Microsoft and appear to have influenced the EC’s decision to investigate Apple, Google and Meta.
According to Vestager, Apple and Google app stores are under investigation. Under the DMA, gatekeepers are no longer allowed to prevent their business users from informing their customers within the app about cheaper alternatives outside the gatekeeper’s ecosystem, a practice known as anti-steering, now prohibited by law.
Stakeholders have informed the EC that the fee structures of Apple and Google appear to contradict the DMA’s requirement of being “free of charge” because these companies continue to impose various recurring fees and restrict steering.
This feedback prompted the EC to launch its first two investigations under the DMA against Apple and Google.
“We will assess the extent to which these fees and restrictions undermine the purpose of the anti-steering provision and, consequently, limit consumer choice,” Vestager explained.
These investigations do not mark the end of potential app store challenges for Apple in the EU.
Breton indicated that the EC has numerous queries regarding Apple’s new app store business model, including the procedures for granting and revoking membership in its developer program, following an incident where Epic Games’ account was briefly suspended.
“We also have queries about the fee structure and various other aspects of the business model,” Breton stated, promising to scrutinize if these practices genuinely offer fair opportunities for app developers per the DMA’s principles.
Apple’s non-compliant app uninstallation Vestager mentioned that Apple is failing to fulfill its obligations under the DMA in two ways: the ease with which it can uninstall apps and the change of default settings, which led to the EC’s third investigation.
Firstly, Apple’s “web browser choice screen” is designed not to present all available options, depriving end-users of the ability to make a fully informed decision on whether to switch from Safari as their default web browser. Additionally, Apple makes it challenging to replace iCloud as the default data syncing service.
Secondly, Apple has neglected to make several apps uninstallable, including Photos, as highlighted by Vestager.
Meta’s data sharing model under scrutiny Meta’s Subscription for No Ads model was already being examined for potential non-compliance under the EU’s Digital Services Act (DMA), making the probe expected, as consent must be freely given under the DMA.
Google suspected of self-preferencing in search
Currently, EU users can avoid data sharing for ad targeting by paying a monthly fee on the web or mobile platforms. Breton expressed doubts about the freedom of consent in this model, suggesting that Meta could offer an alternative based on contextual advertising to allow users to access Facebook and Instagram without sharing data or paying a subscription fee.
While Meta’s subscription model will be scrutinized over the next year, the EC will grant Meta a six-month extension to comply with the DMA’s requirement that Facebook Messenger be interoperable with other messaging services.
Google’s search practices under investigation Breton emphasized that a core aspect of the DMA is the prohibition of self-preferencing, which Google may be violating by unfairly promoting its own services over competitors in search results.
The EC is concerned that Google’s services, including Google Shopping, Google Flights and Google Hotels, receive preferential treatment compared to third-party services.
Similar investigatory steps have been taken to examine whether Amazon favors its own brands in its marketplace.
Breton pointed out that “the Amazon Store has a direct impact not only on numerous sellers, retailers and service providers but also millions of consumers.”
“It is crucial that Amazon adheres to the DMA provisions against self-preferencing,” he added.
