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The European Commission is concerned that various practices by these companies breach DMA rules, such as Apple and Alphabet’s ‘steering rules’ and Meta’s ‘pay or consent’ subscription model.
The EU has stepped up its enforcement of the Digital Markets Act (DMA), as it opened investigations into three tech giants for non-compliance.
The European Commission today (25 March) announced that it will look into Apple, Meta and Google parent company Alphabet. Apple and Alphabet face two investigations each, while Meta faces one over its controversial ‘pay or consent’ model.
The DMA aims to crack down on anti-competitive behaviour among Big Tech companies and came into effect earlier this month. The Act aims to force larger companies to change their policies to level the playing field for smaller entities – or face massive fines if they fail to comply.
The new investigations cover areas where the European Commission suspects these three companies are “falling short” of their DMA compliance. Two investigations will look into Alphabet and Apple’s “steering rules” due to concerns that restrictions on Google Play and Apple’s App Store may “constrain” the ability for developers to promote offers and directly conclude contracts.
Apple in particular has faced a lot of criticism from other companies for its proposed changes to comply with the DMA. An open letter issued earlier this month claimed Apple’s proposal has a “myriad of elements” that do not comply with the DMA.
One of the investigations will look into Apple’s measures to comply with various DMA obligations, such as letting users easily uninstall any software applications on iOS, easily change default settings and give users choice screens that allow them to find alternative default services such as browsers.
Earlier this month, Apple was fined €1.8bn by the European Commission for anti-steering provisions that restricted developers from informing iOS users of alternative music subscription options available outside the App Store, breaking EU antitrust laws. The investigation was opened after a complaint from Spotify in 2019.
Meanwhile, the Commission is also concerned that Google Search results may be “self-preferencing” Alphabet’s own vertical services – such as Google Shopping or Google Flights – over similar rival services. The Commission is also gathering information about Amazon for allegedly favouring its own-brand products on the Amazon Store.
EU internal market commissioner Thierry Breton said the Commission has been in discussions with gatekeepers for months to help them adapt and that “we can already see changes happening on the market”.
“But we are not convinced that the solutions by Alphabet, Apple and Meta respect their obligations for a fairer and more open digital space for European citizens and businesses,” Breton said. “Should our investigation conclude that there is lack of full compliance with the DMA, gatekeepers could face heavy fines.”
‘Pay or consent’
The Commission is also taking a look at Meta’s “pay or consent” model that the company recently adopted. This subscription model lets users either pay for an ad-free version of its apps or consent to targeted advertising.
The European Commission said it is concerned that the binary choice imposed by this model may “not provide a real alternative in case users do not consent”, which it claimed would not achieve the objective of “preventing the accumulation of personal data by gatekeepers”.
The model has been criticised by some groups as a smoksescreen to justify a massive collection of data, a practice that complainants have said is illegal under the GDPR.
Privacy rights group NOYB also filed a complaint last year, saying that consent to online tracking and personalised advertising is only valid if it is freely given and that Meta’s new subscription model should be seen as a “privacy fee”, which NOYB said is the “exact opposite of a genuinely free choice”.
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