The European Union has declared its intention to investigate several of the globe’s largest technology companies for engaging in anti-competitive behavior.
The probes will focus on Meta, Apple, and Alphabet (Google’s parent company), examining their compliance with the Digital Markets Act (DMA), established in 2022. Violations could result in penalties as steep as 10% of the companies’ global annual revenue.
Margrethe Vestager, the EU’s antitrust chief, alongside Thierry Breton, the industry commissioner, revealed the investigations on Monday.
Only six companies fall under the DMA’s scope, including some of the tech industry’s titans: Alphabet, Apple, Meta, Amazon, Microsoft, and ByteDance. Notably, all these companies are headquartered outside of Europe, with five based in the United States and ByteDance in Beijing.
The scrutiny comes shortly after these companies submitted detailed compliance reports, just two weeks prior. This move follows a €1.8 billion fine levied against Apple by the EU for infringing competition laws in the music streaming sector, and coincides with the U.S. accusing Apple of monopolizing the smartphone market.
Apple has expressed its intention to engage constructively with the investigation, asserting confidence in their compliance with the DMA. The company emphasized its efforts to align with the act, highlighting its commitment to user privacy and security in the EU.
Meta responded by defending its subscription model as a legitimate alternative to ad-based revenue, citing its alignment with the DMA among other regulatory standards. Alphabet has yet to comment on the matter.
The EU’s investigation will cover five specific areas of potential non-compliance:
1 & 2 – Examining if Apple and Alphabet restrict apps from direct communication and transactions with users. 3 – Investigating whether Apple limits user choice. 4 – Probing Meta’s practice of charging users for ad-free experiences. 5 – Looking into Google’s potential bias towards its own products and services in search results.
These investigations, particularly focusing on “anti-steering” practices, highlight concerns over the companies’ efforts to limit alternative, cheaper payment methods outside their app stores. The EU is also questioning Apple’s restrictions on app uninstallation, default setting alterations, and the lack of a comprehensive browser or search engine “choice screen.”
The investigation, expected to take about 12 months, may extend longer, according to Breton. Vestager expressed concerns that the companies’ proposed solutions might not fully comply with the DMA, emphasizing the importance of ensuring open and competitive digital markets in Europe.
These investigations are not only consumer-centric but also carry significant implications for billions of global users of these tech products. Breton underscored the urgency of the EU’s actions in light of protecting citizens’ interests. axz axz axz axz axz axz axz axz axz
The timing of these probes is noteworthy, occurring as the European Parliament elections approach in June 2024. Dr. Rupprecht Podszun, a competition law expert, views this as a decisive move by the EU, emphasizing the DMA’s aim for swift action and the pivotal nature of these cases to the companies’ business models. The legal confrontations are expected to be intense, with the Court of Justice ultimately having the final say.
