The European Union has initiated investigations into major tech firms such as Apple, Google’s parent company Alphabet, and Meta for potential violations of the bloc’s new laws governing anti-competitive behaviour. The trio may face significant fines if found guilty of breaching the Digital Markets Act (DMA), a crucial piece of legislation that took effect on 7th March and aims to expand choices for online consumers.
The European Commission is scrutinizing several potential breaches by these tech companies under the new laws. This includes practices such as Apple and Google allowing app developers to direct users to offers outside their app stores, whether Alphabet gives preference to its own services like Google shopping in search results, Meta’s decision to charge users for an ad-free experience on Facebook and Instagram, and whether it complies with DMA provisions on users’ personal data. The investigation also involves assessing whether Apple is providing users with the ability to choose alternative browsers on their phones.
The DMA requires the six major tech “gatekeepers” – Alphabet, Amazon, Apple, Meta, Microsoft, and TikTok owner ByteDance – to adhere to guidelines that ensure fair competition and provide users with more options. Thierry Breton, Commissioner for the internal market, has emphasized that hefty fines loom over these companies should they be found to have breached the act.
Margrethe Vestager, the competition commissioner, stressed that these companies have had ample time to comply with the act and that the goal of the new laws is to offer consumers the choices they are entitled to under competition laws. She also emphasized the imposition of robust deterrents to incentivize tech companies to take their obligations seriously, citing significant fines for non-compliance.
Non-compliance with the DMA can result in fines up to 10% of a company’s turnover, rising to 20% for repeated infringements. With Apple recording annual revenue of $383bn last year, Alphabet at $307bn, and Meta at $134bn, the potential fines are substantial. The commission is also looking into Apple’s new fee structure for alternative app stores and Amazon’s ranking practices on its marketplace.
The EU executive aims to conclude the investigations within a year, in line with the timeframe established under the DMA. Anne Witt, a professor of antitrust law at EDHEC business school in France, highlighted the swift action taken by the commission to enforce the act, calling it a significant test for the DMA.
The outcome of these investigations could have profound implications for the future of competition among tech giants in the European market. As the EU takes a firm stance on enforcing the DMA, it sends a clear message to tech companies that compliance with the new legislation is non-negotiable. Ultimately, the goal of the EU’s actions is to create a fair and open digital space for European citizens and businesses.