Apple, Google And Meta Under Investigation As EU Cracks Down On Big Tech

Investigations into Apple, Alphabet (Google’s parent company), and Meta, three of the six tech giants the EU named as “gatekeepers,” are underway for possibly breaching the Digital Markets Act (DMA). A few of the shortcomings listed are Apple’s rules on steering in the App Store, Alphabet’s rules on steering in Google Play, and Meta’s “pay or consent model.”

The European Commission first designated Alphabet, Amazon, Apple, ByteDance, Meta, and Microsoft as gatekeepers in September of last year. The Commission stated that each of the companies would have six months to come into full compliance with the DMA obligations for each their designated core platform services. Now, the Commission is holding the feet of a few of the six to the fire.

“These decisions to open non-compliance investigations come only two weeks after the implementation deadline has passed and show that DMA compliance is something that we take very seriously. Our five investigations concern Alphabet, Apple and Meta,” remarked Executive-Vice President Margrethe Vestager and Commissioner Thierry Breton in a separate press release.

One of the better known measures implemented by the DMA was mandating gatekeepers to “steer” consumers to offers outside the gatekeepers’ app stores, free of charge. Apple has been receiving pressure for a while for its walled garden approach to business, with Epic Games being at the forefront of the attack as of late. However, Google’s Play Store has not fallen under attack anywhere near the extent of Apple’s App Store, until now.

In a press release, the Commission remarked it was “concerned that Alphabet’s and Apple’s measures may not be fully compliant as they impose various restrictions and limitations.” It added, “These constrain, among other things, developers’ ability to freely communicate and promote offers directly conclude contracts, including by imposing various charges.”

The Commission added that Alphabet is also under investigation for its Google search results possibly not “leading to self-preferencing in relation to Google’s vertical search services, i.e., Google Shopping, Google Flights, and Google Hotels, over similar rival services. The Commission remarked it is concerned that the tech giant’s implemented measures are not enough to comply with the DMA, and may not ensure that third-party services featured on Google’s search results page are treated “in a fair and non-discriminatory manner in comparison with Alphabet’s own services, as required by Article 6(5) of the DMA.”

Google’s competition director Oliver Bethell responded to the accusations, remarking to Reuters, “To comply with the Digital Market’s Act, we have made significant changes to the way our services operate in Europe.” Bethell went on to add, “We will continue to defend our approach in the coming months.”

Apple is also being investigated for possible non-compliance with user choice obligations, namely on its iPhones. The Commission remarked that Apple may not be enabling end users to easily uninstall any software applications on iOS, easily change default settings on iOS, and prompt users with choice screens which allow them to easily select an alternate default service.

Meta is not unscathed in the Commission’s investigations, as it is being looked at for its recently introduced “pay or consent” model, which could be in violation of Article 5(2) of the DMA. That article requires gatekeepers to “obtain consent from users when they intend to combine or cross-use their personal data across different core platform services.” The Commission is worried the the binary choice imposed by Meta’s “pay or consent” model may not provide a real alternative for users who choose not to consent.

The Commission also remarked that Amazon will be investigated as well to clarify whether it might possibly be preferencing its own brand products on the Amazon Store, which would violate the DMA. Apple’s new fee structure will also be investigated in order to determine whether the Cupertino-based company’s new terms and conditions for alternative app stores and distribution of apps from the web (sideloading) may defeat the purpose of its obligation under the DMA.

The Commission stated it intends to close out its investigations within 12 months. If any of the companies listed in the investigations are found to be violation of the DMA, it will inform the “concerned gatekeepers” of its findings and let them know what measures need to be taken. The Commission can impose fines of up to 10% of the company’s total worldwide turnover if the companies fail to comply.