European Commission Executive Vice-President for a Europe fit for the digital age (competition) Margrethe Vestager holds a press conference on “Apple’s App Store Rules for Music Streaming Providers” in Brussels, Belgium, April 30, 2021 ( Photo: Dursun Aydemir Agency /Anadolu via Getty Images)
Dursun Aydemir | Anatolia | Getty Images
On Monday, the European Union launched an investigation into , and , in the primary investigation under sweeping new technology laws within the Digital Markets Act.
“The Commission today opened investigations into non-compliance under the Digital Markets Act (DMA) with Alphabet’s rules on controls in Google Play and Google Search custom preferences, Apple’s rules on controls in the App Store and the selection screen in Safari and ‘Payment model’ or consent of ‘Meta’, the Commission said in a statement.
The first two probes focus on Alphabet and Apple and concern so-called “anti-steering regulations.” Under the DMA, tech companies are prohibited from blocking companies from informing users about cheaper options for their products or subscriptions outside the app store.
“The manner in which Apple and Alphabet have implemented the DMA anti-steering provisions appears to be contrary to the letter of the law. “Apple and Alphabet will continue to charge different fixed fees and continue to restrict control,” EU competition chief Margrethe Vestager said at a news conference on Monday.
Apple has already violated EU regulations. This month, the company was fined 1.8 billion euros ($1.95 billion) after the European Commission found that Apple imposed restrictions on app developers that prevented them from informing iOS users about alternative and cheaper services music subscriptions available outside the application.
In the third investigation, the Commission said it was examining whether Apple had complied with its obligations under the DMA to ensure that users could easily uninstall iOS apps and change default settings. The study also focuses on whether Apple actively prompts users with options to change default services in iOS, such as the web browser or search engine.
The commission expressed “concern that measures taken by Apple, including the design of the web browser selection screen, may prevent users from actually exercising service selection in the Apple ecosystem.”
Apple has stated that it believes it is DMA compliant.
“We are confident that our plan is consistent with the DMA and we will continue to cooperate constructively with the European Commission as it conducts its investigations. “Teams at Apple have created a wide range of new capabilities, features and tools for developers to ensure compliance with the regulation,” an Apple spokesperson told CNBC on Monday.
The fourth investigation concerns Alphabet as the European Commission examines whether the corporate’s display of Google search results “may lead people to decide on their very own preferences for other Google services, such as Google Shopping, over similar offerings from competitors.”
When CNBC contacted Alphabet, it could not immediately be reached for comment.
Meta study
The fifth and final investigation focuses on the Meta platform and its so-called “pay and consent” model. Last year, Meta introduced an ad-free subscription model for Facebook and Instagram in Europe. The Commission is examining whether offering an ad-free subscription model or having users agree to the terms of use of a free service constitutes a breach of the DMA.
“The Commission is concerned that the binary choice imposed by Meta’s pay-or-consent model may not provide a viable alternative in the event that users do not consent, thereby failing to achieve the objective of preventing gatekeepers from collecting personal data.”
Thierry Breton, the EU commissioner for the internal market, said during a press conference that Meta should offer “free alternative options” for its services that are “less personalized”.
“Gatekeepers” is the label for large technology companies that must comply with DMA requirements in the EU.
“We will continue to use all tools available to us if any gatekeeper attempts to circumvent or undermine the DMA’s responsibilities,” Vestager said.
Meta found that subscriptions are a common business model across industries.
“Subscriptions as an alternative to advertising is an established business model across many industries, so we designed ad-free subscription to address several overlapping regulatory obligations, including the DMA. We will continue to cooperate constructively with the Commission,” a Meta spokesman told CNBC on Monday.
Tech giants face fines
The commission has said it goals to finish the investigation inside 12 months, but Vestager and Breton stressed during Monday’s briefing that the DMA is just not imposing a tough deadline on the investigation’s timeline. Regulators will inform corporations of their preliminary findings and explain what measures gatekeepers are taking or should take to deal with the Commission’s concerns.
If any company is found to have breached the DMA, the Commission can impose fines of as much as 10% of the technology company’s total global turnover. In the event of repeated violations, these penalties may increase to twenty%.
The commission said it was also searching for facts and information to clarify whether it could prefer its own brand products on its e-commerce platform over those of competitors. The Commission continues to look at Apple’s new fee structure and other terms of use for alternative app stores.
This month, the tech giant announced that users within the EU would give you the option to download apps from web sites as an alternative of through its own App Store – a change that Apple has opposed for years.
EU investigations into Apple and Amazon don’t involve official investigations.
