In a significant blow to big tech, the EU is investigating Apple, Google's parent companyAlphabet, and Meta over potential violations of the new regulations set by the Digital Markets Act (DMA).
The DMA — with its compliance deadline set on March 7 — is a landmark pro-competition law, designed to ensure a fair digital market for both companies and consumers. To establish a level digital playing field, it lays clear rights and rules for large online platforms (referred to as “gatekeepers”).
Naturally, the big tech trio falls well under the regulation's scope and the companies have already been taking measures to comply with the new set of rules. But according to the EU Commission, certain measures have failed to reach the objectives.
“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,” said Margrethe Vestager, the bloc's antitrust chief, during a press conference today.
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Specifically, the Commission will investigate anti-steering on Alphabet's Google Play and Apple's App Store to ensure that consumers are free to uninstall pre-installed apps and replace them with third-party alternatives.
In addition, it will look further into self-preferencing on Google Search and Safari's choice screen. Meta's “pay or consent model” is also part of the probe, as the Commission is doubting whether such a binary choice truly enables free consent.
With a cautionary tone, the EU's executive arm said it's currently examining Amazon's marketplace ranking practices and Apple's new business model for alternative app stores.
If the investigations prove lack of full compliance, “gatekeepers will face heavy fines,”said Commissioner for Internal Market Thierry Breton.
Failure to comply can lead to fines of up to 10% of the companies' total worldwide turnover — reaching 20% in case of repeated breaches. The Commission also holds the right to adopt extra measures, such as retention orders.
“We will do all we can to create an online space that is fair and competitive to the benefit of all consumers and businesses operating in our Single Market,” said Breton.
“The fact that the Commission has decided already to consider enforcement action demonstrates how seriously it is taking the new regime,” said Alex Haffner, competition partner at UK law firm Fladgate.
It also shows “its absolute insistence on taking pre-emptive action to regulate big tech rather than waiting for complaints about their behaviour to filter in,” Haffner added.