EU launches big tech probes under new Digital Markets Act
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The news: The European Commission has opened non-compliance investigations against Alphabet, Apple and Meta under its sweeping new rules, the Digital Markets Act (DMA).
The numbers: Shares in Apple, Meta and Microsoft where down around 1% by mid-trading session Monday, while shares in Amazon were up 0.5%.
The context: Reports emerged last week that the Commission was preparing to launch full blown probes into the tech giants for potential failures under the new regulations.
Announced Monday, the Commission’s proceedings against Apple and Alphabet will assess whether the measures the companies have implemented regarding their app store obligations are in breach of the DMA. The rules require gatekeepers to allow app developers in the region to “steer” consumers to offers outside of the tech firms’ in-house offering.
The probe will also investigate whether the new subscription model for EU users of Meta’s Facebook and Instagram platforms comply with the rules, which require gatekeepers to obtain consent from users when they intend to combine or cross-use their personal data.
The Commission plans to complete the investigations within 12 months. Should the firms be found to be in breach of the DMA, the Commission can impose fines of up to 10% of the company’s total worldwide turnover, or 20% in cases of repeated infringement.
Additionally, the Commission is looking into Amazon’s treatment of its own brand products on the Amazon store. It has issued orders to Alphabet, Amazon, Apple, Meta, and Microsoft, requiring them to retain documents which might be used to assess their compliance with the new rules.
The US Justice Department also launched a sweeping antitrust probe against Apple late last week, which alleges that Apple is monopolising the market for smartphones, stifling innovation and the development of apps and related technology.
What they said: The Commission's executive vice president, Margrethe Vestager said: “We suspect that the suggested solutions put forward by the three companies do not fully comply with the DMA. We will now investigate the companies’ compliance with the DMA, to ensure open and contestable digital markets in Europe.”
The source: European Commission press release
