Big Tech targeted under new law meant to prevent cornering of digital markets
LONDON>> European Union regulators opened investigations into Apple, Google and Meta on Monday, the first cases under a sweeping new law designed to stop Big Tech companies from cornering digital markets.
The European Commission, the 27-nation bloc’s executive arm, said it was investigating the companies for “non-compliance” with the Digital Markets Act.
The Digital Markets Act that took full effect earlier this month is a broad rulebook that targets Big Tech “gatekeeper” companies providing “core platform services.” Those companies must comply with a set of do’s and don’ts, under threat of hefty financial penalties or even breaking up businesses. The rules have the broad but vague goal of making digital markets “fairer” and “more contestable” by breaking up closed tech ecosystems that lock consumers into a single company’s products or services.
The commission has heard complaints that tech companies’ measures to comply have fallen short, European Commission Vice President Margrethe Vestager, the bloc’s competition chief, said at a press briefing in Brussels.
“Today, we decided to investigate a number of these suspected non-compliance issues. And as we unearth other problems, we will tackle those too.”
The decision was met with immediate pushback from industry groups like the Computer & Communications Industry Association, a not-for-profit trade group in Washington that represents tech and communications companies.
“The timing of these announcements, while the DMA compliance workshops are still ongoing, makes it look like the Commission could be jumping the gun,” the group said in a prepared statement. “Possible outcomes aside, this move risks confirming industry fears that the DMA compliance process might end up being politicized.”
The companies have been ordered to hold on to certain documents that the commission can access in current and future investigations, she said.
Regulators are looking into whether Google and Apple are fully complying with the DMA’S rules requiring tech companies to allow app developers to direct users to cheaper options available outside their app stores. The commission said it’s concerned the two companies are imposing “various restrictions and limitations” including charging recurring fees that prevent apps from freely promoting offers.
Google is also facing scrutiny for not complying with DMA provisions that prevent tech giants from giving preference to their own services over rivals. The commission said it is concerned Google’s measures will result in third-party services listed on Google’s search results page not being treated “in a fair and non-discriminatory manner.”
Google said that it has made “significant changes” to the way its services operate in Europe to comply with the DMA.
“We will continue to defend our approach in the coming months,” Google’s director of competition, Oliver Bethell, said.
The commission is also investigating whether Apple is doing enough to allow iphone users to easily change web browsers.
Apple said it’s confident that its plan complies with the DMA, and it will “continue to constructively engage with the European Commission as they conduct their investigations.” The company said it has created a wide range of new developer capabilities, features and tools to comply with the regulation.
The commission is also looking into Meta’s option for European users to pay a monthly fee for ad-free versions of Facebook or Instagram, so they can avoid having their personal data used to target them with online ads.
“The Commission is concerned that the binary choice imposed by Meta’s ‘pay or consent’ model may not provide a real alternative in case users do not consent, thereby not achieving the objective of preventing the accumulation of personal data by gatekeepers,” it said.
Meta said it will “engage constructively” with the Commission.
“Subscriptions as an alternative to advertising are a well-established business model across many industries, and we designed Subscription for No Ads to address several overlapping regulatory obligations, including the DMA,” it said in a prepared statement.