Tech giants Apple, Google and Meta will be investigated by European Union antitrust regulators for potential violations of the EU's landmark law to promote competition in the digital economy that could result in large fines.
The investigations of the Big Tech trio are the first to occur under provisions of the Digital Markets Act that took effect on March 7. The rules require six designated "gatekeepers" that provide services like search engines, social media networks and chat apps to comply with a guidance to level the playing field with their rivals and to give users more choices. Violations of the law could result in fines amounting up to as much as 10% of the companies' global annual turnover.
The European Commission's investigation focuses on Google parent Alphabet's rules on steering in Google Play and self-preferencing on Google Search, Apple's rules on steering in the App Store and the choice screen for Safari users, as well as Meta's "pay or consent model."
The Commission said it "suspects that the measures put in place by these gatekeepers fall short of effective compliance of their obligations under the DMA." The EU executive aims to conclude the investigations within a year, which is the timeframe outlined for such oversight activities in the DMA.
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Facebook and Instagram parent Meta told FOX Business in a statement that its "subscription for no ads" service complies with directions provided by Europe's highest court last year and that data protection authorities in France, Denmark and Germany have acknowledged the validity of a subscription service as a model to obtain data consent.
"Subscriptions as an alternative to advertising are a well-established business model across many industries, and we designed Subscription for No Ads to address several overlapping regulatory obligations, including the DMA," Meta said in a statement provided to FOX Business. "We will continue to engage constructively with the Commission."
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An Apple spokesperson told FOX Business that, "We're confident our plan complies with the DMA, and we'll continue to constructively engage with the European Commission as they conduct their investigations. Teams across Apple have created a wide range of new developer capabilities, features, and tools to comply with the regulation."
"At the same time, we've introduced protections to help reduce new risks to the privacy, quality, and security of our EU users' experience. Throughout, we've demonstrated flexibility and responsiveness to the European Commission and developers, listening and incorporating their feedback," Apple's statement concluded.
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Google Director of Competition Oliver Bethell told FOX Business: "To comply with the Digital Markets Act, we have made significant changes to the way our services operate in Europe. We have engaged with the European Commission, stakeholders and third parties in dozens of events over the past year to receive and respond to feedback, and to balance conflicting needs within the ecosystem. We will continue to defend our approach in the coming months."
Additionally, the Commission is taking steps to gather information for a potential investigation of Apple's new fee structure for alternative app stores and Amazon's ranking practices on its marketplace. It has ordered gatekeepers to retain certain documents to monitor implementation of the law and compliance with their obligations under the rules.
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An Amazon spokesperson told FOX Business the company is "compliant with the Digital Markets Act and has engaged constructively with the European Commission on our plans since the designation of our services. We continue to work hard every day to meet all of our customers' high standards within Europe's changing regulatory environment."
Reuters contributed to this report.
