Key Takeaways:
On Monday, European antitrust regulators opened their first investigations into US tech giants Apple, Google, Meta, and Amazon for potential breaches of the new Digital Markets Act that could potentially lead to heavy fines being imposed on the companies.
Apple, Google, Meta, Microsoft, Amazon, and ByteDance Being Investigated For DMA Violations
The landmark new legislation, which came into effect on March 7th, aims to challenge the power of Big Tech by creating a fairer online space for smaller companies to compete while giving users more freedom to move between rival services like social media platforms, internet browsers, and app stores.
During a press conference, the EU’s internal market commissioner, Thierry Breton said regulators were not convinced by the DMA compliance solutions provided by Alphabet – Google’s parent company, Apple, and Meta as they failed to “respect their obligations for a fairer and more open digital space for European citizens and businesses”.
Meanwhile, the six “gatekeepers” – Google, Meta, Apple, Microsoft, Amazon, and ByteDance – claim that they have deployed a large team of engineers to meet the obligations of the DMA to give users more freedom to choose competing services.
Apple’s New Commission Fee Standard on Third-Party Developers Under the EU’s Spotlight
Apple is being investigated to confirm whether it complies with the EU’s requirement to allow users to easily perform actions such as uninstalling apps on the iPhone, changing default settings on its iOS operating system, or switching to a rival browser or search engine on the smartphone.
Regulators are also concerned with the “anti-steering” measures implemented by Apple which is limiting iOS app developers’ ability to inform their users about services outside of the company’s App Store, free of charge. Apple is now charging a 27% commission on each transaction that takes place on third-party iPhone app stores.
The Cupertino, California-headquartered firm said it is confident with its DMA compliance plans. Apple claims to have shown responsiveness to the Commission and developers throughout the process and considered their feedback before making the policy change.
Google Being Investigated for Discriminating Rival Services on its Search Engine
The EU Commission is also examining whether internet search giant Google favored its offerings such as Google Shopping, Google Flights, and Google Hotels over rivals and discriminated against third-party services on search results.
The Commission criticized both Apple and Google for their free structures, stating that the companies went against the DMA’s requirement to recommend third-party products and services “free of charge”.
Amazon De-ranked Rivals, While Meta Introduced a Subscription Model for Ad-free Facebook
Amazon is being investigated for allegedly de-ranking third-party products while promoting its items on the marketplace. A spokesperson for the company said it is compliant with the Digital Markets Act and has “engaged constructively” with the Commission on its plans to update its pricing and raking policies, and will continue to do so as the investigation proceeds.
Meta has also been added to the mix after it introduced a controversial subscription service last November for removing ads from its social media platforms Instagram and Facebook. Commissioner Breton said that the Mark Zuckerberg-owned company should offer the ad-free option free of cost.
Meta said it was working on ways to comply with the DMA’s guidance. A spokesperson for the company said that subscriptions as an alternative to advertising are a “well-established business model across many industries” and Meta designed the ‘Subscription for No Ads’ service to “address several overlapping regulatory obligations”, which includes the DMA.
DMA Offenders will have to Pay Fines Equivalent to 10% of their Annual Turnover
The EU Commission’s investigations into the six gatekeepers will be completed within a year. Regulators have ordered the companies to retain certain vital documents, which will allow regulators to access relevant information important for its current and future probes.
If found to be guilty of not complying with the new law, the EU Commission – the bloc’s executive arm – could impose fines of as much as 10% of the companies’ global annual turnover. Repeat offenders could face penalties of up to 20%.
US antitrust regulators are also cracking down on Big Tech over alleged anti-competitive practices that could lead to the breaking up of several firms.
More News: Apple And Google May Be Broken Up Into Separate Companies After Anti-Trust Cases In US and Europe
