EU fines Apple €500m and Meta €200m for breach of digital rules
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The news: The European Union has slapped Apple and Meta with hefty penalties for breaching of its Digital Markets Act (DMA) obligations, in the first enforcement of its landmark digital antitrust law.
The numbers: The Commission announced Wednesday that it has fined Apple and Meta with €500 million ($890 million) and €200 million respectively.
The context: The decision follows a year-long investigation by the Commission into Apple's rules on steering in the App Store and Meta's “pay or consent model”. In mid-2024, the Commission informed Apple and Meta of its preliminary view that the companies were in breach of the DMA, and were given the option of defending the Commission’s preliminary findings. The Commission can fine non-compliant companies up to 10% of their global annual turnover.
On Apple’s steering terms, the Commission found that Apple fails to comply with the obligation to allow app developers to inform customers, free of charge, of alternative offers outside the App Store, steer them to those offers and allow them to make purchases.
The Commission said that due to a number of restrictions imposed by Apple, app developers cannot fully benefit from the advantages of alternative distribution channels outside the App Store.
In addition to the fine, Politico reports that Apple has been issued with a cease-and-desist order requiring it to make further product changes by late June. If the firm fails to comply, the Commission can fine it for every additional day it is in breach of the law.
The Commission also found that Meta’s “consent or pay” model is not compliant with the DMA, as it did not give users the required specific choice to opt for a service that uses less of their personal data but is otherwise equivalent to the ‘personalised ads' service. Meta's model also did not allow users to exercise their right to freely consent to the combination of their personal data.
The EU also lifted a decision that designated Facebook Marketplace as a regulated service, meaning that part of Meta's business no longer falls within the remit of the DMA.
What they said: Responding to the fine, Meta’s chief global affairs officer, Joel Kaplan said: “The European Commission is attempting to handicap successful American businesses while allowing Chinese and European companies to operate under different standards. This isn’t just about a fine; the Commission forcing us to change our business model effectively imposes a multi-billion-dollar tariff on Meta while requiring us to offer an inferior service. And by unfairly restricting personalized advertising the European Commission is also hurting European businesses and economies.”
The Commission’s antitrust chief, Teresa Ribera, said: “Apple and Meta have fallen short of compliance with the DMA by implementing measures that reinforce the dependence of business users and consumers on their platforms. As a result, we have taken firm but balanced enforcement action against both companies, based on clear and predictable rules.”
The sources: European Commission, Meta , Politico
