According to the information that the European Commission shared, Alphabet, Apple and Meta, which were designated as “gatekeepers” in the regulation of digital markets, are not complying with the rules of the new law that aims to protect consumers from harmful practices in the digital world, the DMA, the acronym in English for Digital Markets Act.
More specifically, the investigations target Alphabet’s rules on guidance in the Google Play app store and Apple’s rules on the App Store, but also “self-preference in Google search, and the choice of browsers and changing defaults on iOS and Safari, as well as the “payment or consent” model that Meta adopted on Facebook and Instagram.
“We suspect that the solutions suggested by the three companies do not fully comply with the DMA. We will now investigate the companies’ compliance with the DMA, to ensure open and contestable digital markets in Europe”, warns Margrethe Vestager, Executive Vice President of the European Commission and responsible Commissioner by competition.
The investigations announced today must be completed within 12 months, after which the European Commission will inform companies about the results and define measures that it considers appropriate. If an infringement is identified fines can reach 10% of the company’s total revenue, increasing to 20% if violations are repeated. These are millionaire values if we look at the turnover of companies, which are among the most valuable in the world. In the rules defined by the DMA regulation, in more serious cases the European Commission can take other measures, such as requiring companies to separate their business or preventing the acquisition of additional services.
The Commission also launched investigations into Apple’s new proposal to apply fees to alternative app stores and Amazon’s marketplace rating system, which gives preference to its own products. These practices have been criticized in the market and challenged by competitors.
The package of measures announced today by the European executive also includes the decision to give Meta another six months to comply with Facebook Messenger interoperability obligations. The Commission explains that this decision is based on a previous request to which Meta has already responded, but clarifies that Facebook Messenger is also covered by the DMA.
This is a complicated start to the week for big technology companies that have been under close scrutiny from the European Commission with the new regulations on digital markets and services (DMA and DSA).. Companies are also being subjected to greater pressure from the United States regarding the way they control their market power and how they apply data protection and user privacy rules, and just last week the United States Department of Justice United revealed a new lawsuit against Apple.
What is at stake in the European Commission’s new investigations?
The Digital Markets Regulation (DMA) came into force on March 7th, and on this date companies designated by the European Commission as gatekeepers now have to comply with the obligations of the Digital Markets Regulation (DMA), which brings new rules for Big Tech, to limit unfair practices by large platforms and guarantee the openness of relevant services.
In recent months, there has been no shortage of warnings about the possibility that Big Tech services may not be compliant. to the new regulations on digital markets and services (DMA and DSA) and companies themselves have multiplied efforts, in a race against time, to avoid processes that result in millionaire fines, much higher than those provided for in the General Data Protection Regulation (GDPR).
Commissioner Margrethe Vestager herself had already warned that Apple and Meta’s new fees could harm consumers and that Brussels was paying attention to these situations. Added to this is criticism from several technology companies that depend on the services of gatekeepers, such as Spotify, Epic Games and Deezer,
These are the main reasons now highlighted by the European Commission for the new investigations
. Google Play and App Store app store options
The European Commission wants to assess whether the measures implemented by Alphabet and Apple in relation to their app store obligations violate the DMA. “Article 5(4) of the DMA requires gatekeepers to allow app developers to “steer” consumers to offers outside of gatekeepers’ app stores, free of charge.”
According to the information shared, the executive fears that Alphabet and Apple’s measures may not be fully compliant, as they impose several restrictions and limitations. Among other things, they limit the ability of developers to communicate and promote offers freely and to enter into contracts directly, while also imposing various charges.
. Self-preference in Google search
The lawsuit against Google’s parent company Alphabet seeks to determine whether search results shown on the search engine may “lead to self-preference toward Google’s vertical search services (e.g., Google Shopping; Google Flights; Google Hotels) ” in relation to competing services.
The objective is to understand whether Google gives preference to its services over other existing ones and whether Google search results are not treated in a fair and non-discriminatory way.
. Compliance with user choices on Apple iOS
In relation to Apple, the European Commission has opened another process where it intends to verify whether the company is complying with its data obligations to give users the possibility of choice in several areas. Here comes the ability to easily uninstall any software applications on iOS, easily change default settings on iOS and provide choice screens that should allow them to effectively and easily select an alternative service, such as a browser or search engine on their iPhones.
The indication of a choice screen for the internet browser, instead of the single installation of Safari, similar to what already happens on Android with Chrome, is one of the considerations. iOS 17.4 already brings changes that must now be evaluated.
. Meta’s “payment or consent” model on Facebook and Instagram
Last year, Meta introduced a new model for users in the European Union where it gave them the possibility of paying a monthly subscription if they did not want to consent to accessing data in different services on the platform. “The Commission is concerned that the binary choice imposed by Meta’s “payment or consent” model may not constitute a real alternative if users do not give their consent, thus failing to achieve the objective of preventing the accumulation of personal data by gatekeepers “, says the EC.
The company had already advanced with a reformulation of this proposal but it may not be enough to avoid more severe measures by the European executive.
At the press conference where she explained the measures taken in relation to Big Tech, the European competition commissioner assured that “cWe will continue to use all available tools if any gatekeeper attempts to circumvent or undermine the DMA’s obligations. It is important for us to achieve the objectives of the DMA so that consumers benefit from open and contestable markets. A competitive market.”
Margrethe Vestager also recalls that “this reflection was greatly influenced by our experience in the application of antitrust law, where we saw the temptation to disregard the law. We brought several cases of violation of competition in the technology sector that ended up leading to the DMA“. The Commissioner points out cases against Google (Shopping, Android, AdSense and the ongoing AdTech investigation), Apple (such as the AppStore and Apple Pay cases) or Amazon (Buy Box/Prime/Data). “We checked changes as a result of these cases. But it is also clear that some of the issues in the digital economy are systemic and need to be addressed upfront, he stresses.
Editor’s Note: The news was updated with more information during the press conference. Last updated 11:27am
Tags: Europe opens investigation processes Big Tech Google Apple Meta targets Business
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