The European Union (EU) has launched probes into Apple, Alphabet and Meta in the first use of a landmark new law designed to rein in Big Tech’s market power.
The European Commission, the EU’s executive arm, announced official probes on Monday into whether Apple and Google owner Alphabet were unduly favouring their own app stores, as well as Facebook owner Meta’s use of personal data for advertising. The three tech companies employ well over 12,000 people in the Republic.
The probes fall under the Digital Markets Act (DMA), which is designed to tackle the dominance of so-called digital “gatekeepers” – the biggest online platforms – and came into effect earlier this month.
If found guilty of non-compliance, companies face hefty fines that could amount to up to 10 per cent of their global turnover.
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“These are serious cases,” said Margrethe Vestager, the EU’s executive vice-president in charge of digital policy. “And [they are] emblematic of what the DMA is supposed to deliver when it comes to choice for consumers.”
“Had we been able to resolve that with a mere discussion, they would have been solved by now,” she added.
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The legislation requires companies to allow app developers to “steer” users to products beyond their own platforms without charging them for doing so. It also states that platforms offering ranked search results must treat the listing of third-party services in a “fair and non-discriminatory” manner.
The commission said it was concerned that Apple and Alphabet had imposed “restrictions and limitations” that constrained developers’ ability to promote other services.
It added it was looking at services including Google Shopping and Google Flights over whether the company was giving preference to these in its search results.
The commission said it was looking at whether Apple was meeting its obligations to allow users “to easily uninstall any software applications” on its iOS operating systems and change default settings, browsers and search engines.
It also opened proceedings against Meta over whether the group’s new “pay or consent” subscription model complied with the DMA requirement for gatekeepers to obtain user agreement to “combine or cross-use their personal data” – such as for advertising purposes.
Thierry Breton, the EU’s commissioner for the internal market, said that despite the measures taken by the tech companies to adapt to the DMA, “we are not convinced that the solutions by Alphabet, Apple and Meta respect their obligations for a fairer and more open digital space for European citizens and businesses”.
The DMA has created a framework of rules designed to force Big Tech companies to make changes to their operations in ways that allow for greater competition in digital markets.
The moves come a month after the EU announced a €1.8 billion fine for preventing music streaming apps such as Spotify from informing users about cheaper deals. The US Department of Justice last week announced it was suing Apple for allegedly using its power in the smartphone sector to squash competition.
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Alphabet and Meta have also regularly been in the crosshairs of regulators in the EU and beyond in recent years.
Brussels hopes to finalise its probes in one year. The timeline is faster than the many years it has historically taken to deal with antitrust investigations.
Tech companies pushed back on Monday against suggestions of wrongdoing. Apple said it was “confident” it was complying with the DMA, adding: “We’ll continue to constructively engage with the European Commission as they conduct their investigations.”
Amazon said it was “compliant” with the rules and that it had “engaged constructively with the European Commission on our plans since the designation of two of our services”.
Meta said: “Subscriptions as an alternative to advertising are a well-established business model across many industries... We will continue to engage constructively with the Commission.”
Oliver Bethell, director of competition at Google, said: “To comply with the Digital Markets Act, we have made significant changes to the way our services operate in Europe...We will continue to defend our approach in the coming months.”
Daniel Friedlaender, senior vice-president and head of CCIA Europe, a tech industry lobbying group, said: “The timing of these announcements, while the DMA compliance workshops are still ongoing, makes it look like the Commission could be jumping the gun. Possible outcomes aside, this move risks confirming industry fears that the DMA compliance process might end up being politicised.” – Copyright The Financial Times Limited 2024
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