Heavy fines potentially await Google, Apple and Meta as the European Commission opens investigations into how these tech giants are complying with its new antitrust rules seeking to rein in the power of tech giants.
If found guilty, the EU commission can fine each company up to 10 percent of its annual global revenue, which would mean billions of dollars. For example, Google parent company Alphabet generated $307 billion in revenue in 2023, meaning the EU could fine the company roughly $30 billion.
Overall, the new investigations unveiled Monday revolve around: Alphabet’s rules on steering in Google Play and self-preferencing in Google Search; Apple’s rules on steering in the App Store and on choosing browsers and changing defaults; and Meta’s “pay or consent model.”
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“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,” said EU Commissioner Thierry Breton in a statement Monday. “Should our investigation conclude that there is lack of full compliance with the DMA [Digital Markets Act], gatekeepers could face heavy fines.”ADVERTISEMENT
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CRN reached out to Google, Meta and Apple for comment but did not hear back by press time.
Digital Markets Act Goes Into Effect
On March 7, a new antitrust Digital Markets Act went into effect, specifically targeting six tech giants dubbed “gatekeepers:” Amazon, Apple, ByteDance, Google, Meta and Microsoft.
The goal of the DMA is to ensure contestable and fair markets in the tech sector. It seeks to better regulate large IT companies whose position can grant them power to create a bottleneck in the digital economy.
“We suspect that the suggested solutions put forward by the three companies do not fully comply with the DMA,” said the EU’s antitrust chief, Margrethe Vestager, in a statement.
Investigations Into Google And Apple
Specifically for Google and Apple, the EU commission will investigate new anti-steering rules in the companies’ app stores and whether Google is guilty of self-preferencing its own services within its highly popular search engine.
The commission opened an investigation into Google to determine whether Alphabet is complying with the DMA that ensures third-party services featuring on Google’s search results page are treated in a fair and non-discriminatory manner in comparison with Alphabet’s own services.
For Apple, another investigation is focused on whether Apple has complied with the DMA to enable end users to easily uninstall any software applications on iOS, easily change default settings on iOS, and prompt users with choice screens that must effectively and easily allow them to select an alternative default service, such as a browser or search engine on their iPhones.
Other EU Investigations
In addition, EU regulators are investigating Apple’s new fee structure for distributing apps outside the App Store, as well as whether Amazon is self-preferencing its own products on its store.
Finally, the commission started an investigation into Meta to see whether its newly introduced “pay or consent” model for users in the EU complies with the DMA, which requires Meta to obtain consent from users when they intend to combine or cross-use their personal data across different core platform services.
The commission said it is concerned that the binary choice imposed by Meta’s “pay or consent” model “may not provide a real alternative in case users do not consent,” thereby not achieving the DMA’s objective of preventing the accumulation of personal data by gatekeepers.
Fines Can Reach Up To 20 Percent Of Annual Revenue
The commission said it intends to conclude all the investigations within 12 months.
After it completes its investigations, the commission will tell each gatekeeper what must be done to address concerns and what measures the regulator is planning to take.
If not in compliance with the DMA, the commission can fine each company up to 10 percent of their annual global revenue. The commission can also fine each company up to 20 percent of early revenue in cases of repeated infringement.
“We will now investigate the companies’ compliance with the DMA to ensure open and contestable digital markets in Europe,” said Vestager.