European Union (EU) antitrust regulators fined Apple and Meta a combined 700 million euros ($798 million), the first sanctions issued under the EU’s landmark Digital Markets Act (DMA) aimed at curating the power and influence of so-called “Big Tech.”
Apple was the first company charged under the Digital Markets Act last June, although, at the time, the ruling was preliminary and did not carry specific penalties. At the time, the EU informed Apple of its findings that the company was not compliant with the DMA, and its App Store prevented app developers from “freely steering consumers to alternative channels for offers and content.”
“Under the DMA, app developers distributing their apps via Apple’s App Store should be able to inform customers, free of charge, of alternative offers outside the App Store, steer them to those offers and allow them to make purchases,” the European Commission said in a press release this week.
“The Commission found that Apple fails to comply with this obligation. Due to a number of restrictions imposed by Apple, app developers cannot fully benefit from the advantages of alternative distribution channels outside the App Store. Similarly, consumers cannot fully benefit from alternative and cheaper offers as Apple prevents app developers from directly informing consumers of such offers. The company has failed to demonstrate that these restrictions are objectively necessary and proportionate.”
The EU fined Apple €500 million for this alleged offense, nearly $570 million at current exchange rates. The European Commission also ordered Apple to “remove the technical and commercial restrictions on steering” and to avoid further non-compliance.
Apple said it will challenge the fine, per Reuters.
“Today’s announcements are yet another example of the European Commission unfairly targeting Apple in a series of decisions that are bad for the privacy and security of our users, bad for products, and force us to give away our technology for free,” Apple said in a statement.
As for Meta, the EU claims the company’s “consent or pay” advertising model, introduced in November 2023, violates the DMA because it does not provide users “the required specific choice to opt for a service that uses less of their personal data but is otherwise equivalent to the ‘personalized ads’ service.”
“Meta’s model also did not allow users to exercise their right to freely consent to the combination of their personal data,” the European Commission adds.
After discussing the model with Meta, the Commission says Meta introduced a different version last November, which is currently being assessed.
The new penalty of €200 million ($227 million) concerns the period from March 2024, when the DMA’s obligations became legally binding, to November. Any additional fines remain under consideration depending upon the changes Meta made to its advertising model.
Meta is also displeased with the EU’s findings.
“The European Commission is attempting to handicap successful American businesses while allowing Chinese and European companies to operate under different standards,” Meta says. “This isn’t just about a fine; the Commission forcing us to change our business model, effectively imposing a multi-billion-dollar tariff on Meta while requiring us to offer an inferior service.”
Apple and Meta are “required to comply with the Commission’s decisions within 60 days, otherwise they risk periodic penalty payments,” the Commission says.
“Today’s decisions send a strong and clear message. The Digital Markets Act is a crucial instrument to unlock potential, choice and growth by ensuring digital players can operate in contestable and fair markets. It protects European consumers and levels the playing field,” says Teresa Ribera, Executive Vice-President for Clean, Just and Competitive Transition.
“Apple and Meta have fallen short of compliance with the DMA by implementing measures that reinforce the dependence of business users and consumers on their platforms. As a result, we have taken firm but balanced enforcement action against both companies, based on clear and predictable rules. All companies operating in the EU must follow our laws and respect European values,” Ribera concludes.
“Enabling free business and consumer choice is at the core of the rules laid down in the Digital Markets Act. This includes ensuring that citizens have full control over when and how their data is used online, and businesses can freely communicate with their own customers,” adds Henna Virkkunen, Executive Vice-President for Tech Sovereignty, Security and Democracy. “The decisions adopted today find that both Apple and Meta have taken away this free choice from their users and are required to change their behavior. We have a duty to protect the rights of citizens and innovative businesses in Europe and I am fully committed to this objective.”
Image credits: Header photo licensed via Depositphotos.
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