EU to Investigate Non-Competitive Practices of AB, Apple, Meta, and Google
The EU has announced that it will investigate some of the largest technology firms for their non-competitive practices.
Meta, Apple, and Google are facing investigations due to violations of the Digital Markets Act (DMA) introduced in 2022.
If found to be in violation, the companies could face significant fines of up to 10% of their annual turnover.
EU Competition Chief Margrethe Vestager and Industry Chief Thierry Breton announced the investigations on Monday.
Only six companies fall under the obligations of the DMA, but these include some of the world's largest tech firms: Alphabet, Apple, Meta, Amazon, Microsoft, and ByteDance.
None of these companies are actually based in Europe - with five located in the US, and ByteDance headquartered in Beijing.
Just two weeks after submitting their compliance reports, investigations have been opened into three of these companies.
This comes three weeks after the EU fined Apple €1.8 billion ($1.5 billion) for violating competition laws in music streaming.
Meanwhile, the United States has launched a historic lawsuit against Apple for monopolizing the smartphone market.
An Apple spokesperson stated that the company will participate constructively in the investigation and are confident that their plans comply with the Digital Markets Act.
They added that they have established various mechanisms to comply with the groundbreaking laws of the EU, as well as privacy and security measures for EU users.
"We have demonstrated flexibility and responsiveness with the European Commission and developers, listened to their feedback, and incorporated their input," they said.
Meanwhile, a Meta spokesperson said that the use of subscriptions to avoid ads is "a well-established business model in many industries."
"We have designed 'Ad-Free Subscription' to address various regulatory obligations, including DMA... We will continue to communicate constructively with the Commission," they said.
Alphabet was reached for comment.
Five Investigations
The EU stated in its announcement that it will examine five different instances of non-compliance:
1 and 2 - Whether Apple and Alphabet allow apps to freely communicate and contract with users
3 - Whether Apple provides users with sufficient choice
4 - Whether Meta requires people to pay to prevent their data from being used for ads
5 - Whether Google prioritizes its own products and services in search results
The first two investigations address a situation known as "anti-steering" - with the EU believing that companies make it difficult for users to know ways to access their services other than through the app stores' own payment methods.
At the third point, the EU specifies that Apple should provide "choice screens" to enable users to easily remove apps from their devices, change default settings, and use different browsers or search engines.
The EU stated that Apple's web browser "choice screen" does not offer people enough choice and that some apps like Apple Photos cannot be deleted.
According to Vestager, the investigation will last approximately 12 months - but Breton later suggested it could take a bit longer.
"We suspect that the solutions proposed by the three companies do not fully comply with the DMA," he said.
"We will now examine the companies' compliance with the DMA, so that we can ensure open and competitive digital markets in Europe."
All five cases are consumer-focused and could be highly relevant to the billions of people using these companies' products.
There may be another reason behind the EU's swift action: the European Parliament elections are scheduled for June 2024.
Dr. Rupprecht Podszun, Director of the Institute of Competition Law at Heinrich Heine University in Düsseldorf, said this sends a "strong signal" from the EU.
"The DMA is designed for swift results," he said.