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Apple, Google, Meta probed by EU in test of new digital law

Bloomberg
Bloomberg • 4 min read
Apple, Google, Meta probed by EU in test of new digital law
The European Commission said Monday that Apple and Google’s app store rules will be targeted in the first probes. Photo: Bloomberg
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Apple Inc., Alphabet Inc.’s Google and Meta Platforms Inc. face the risk of potentially hefty fines as the European Union opened a full-blown investigation into the firms’ compliance with strict new laws reining in the power of Big Tech. 

The European Commission said Monday that Apple and Google’s app store rules will be targeted in the first probes under the bloc’s Digital Markets Act, how Google search results might unfairly preference its own services and how Apple may make it harder for users to choose alternatives to its Safari browser.

New subscription fees for Meta’s Instagram and Facebook platforms will also be targeted by the probe, which could hit firms with fines of up to 10% of global revenue, or up to 20% in the case of repeated breaches.

“We suspect that the suggested solutions put forward by the three companies do not fully comply with the DMA,” EU antitrust chief Margrethe Vestager said. She added that the probes involve “serious cases.” 

The commission also warned about further scrutiny on Apple’s new fee structure for alternative app stores and Amazon.com Inc.’s ranking practices on its marketplace. 

Shares in Apple and Alphabet dipped by 1.3% at 10.11 am in New York. Meta declined by 0.7%. Amazon shares increased 0.9%.

See also: Apple shares are back to winning ways as AI optimism builds

An Apple spokesperson said the company is confident it complies with the DMA, while Google’s director for competition, Oliver Bethell, said the company has made significant changes to its services in Europe and that it will “continue to defend our approach in the coming months.” A spokesperson for Meta said the company designed its offerings to comply with overlapping regulatory obligations, including the DMA.

For Apple, the EU probe comes as a one-two punch with a sweeping antitrust probe in the US, where the Justice Department and 16 attorneys general sued the firm last week, accusing the iPhone maker of violating antitrust laws by blocking rivals from accessing hardware and software features on its popular devices. The EU also recently hit Apple with a €1.8 billion ($2.62 billion) fine for blocking music streaming apps from informing users of cheaper deals.

Bloomberg reported last week that the EU probes on Apple, Google and Meta were due imminently.

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Daniel Friedlaender, who heads up the European office of the Computer & Communications Industry Association — whose members include Apple, Google and Meta — said the timing of the probes so soon after the DMA came into force suggests “the commission could be jumping the gun.” 

Vestager, in a news conference, rejected that charge. “I definitely don’t think that this is rushed, it is very timely,” she said. 

Under the DMA, six tech giants — Alphabet, Apple, Amazon, Meta, TikTok owner ByteDance Ltd. and Microsoft Corp. — are subject to a range of new prohibitions and obligations. 

For Apple, that means having to break open its previously closed iPhone app ecosystem and allow users to download software from other online stores and from the web. 

Apple’s attempt to step into line with the rules in the EU involves jettisoning the up-to-30% commission it has imposed on developers since its App Store launched in 2008. But the company has added other costs for software makers — including a 3% payment processing charge for apps that use Apple’s in-app purchase system. It also is imposing a €0.50 fee per app install — via Apple’s store or third-party marketplaces — for software installed more than 1 million times in a 12-month period. 

Last year, Google faced its fourth EU abuse of dominance case in recent years — with the Brussels watchdog probing the firm’s conduct in advertising technology. This came following fines of over €8 billion from the EU, as part of three other decisions that are still being challenged through the bloc’s courts. 

Meta, meanwhile, continues to face an ongoing EU abuse of dominance investigation into Facebook Marketplace, which the commission alleges harms competition for classified ad rivals.  

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