Apple and Meta in the crosshairs: Brussels accuses tech giants of breaching the Digital Markets Act

Apple and Meta in the crosshairs: Brussels accuses tech giants of breaching the Digital Markets Act

The European Commission has taken a firm stance by declaring that Apple and Meta have failed to comply with the Digital Markets Act (DMA). The consequences were swift: a fine of €500 million for Apple and €200 million for Meta. But what exactly are the breaches that led to these penalties?

What is the DMA?

The Digital Markets Act (DMA) is a European Union regulation aimed at ensuring equitable and contestable digital markets. It was approved on September 14, 2022, and came into force on November 1, 2022, although its substantive provisions have been applicable since May 2, 2023.

The DMA seeks to regulate the power of “gatekeepers,” which are the large digital platforms that control access to essential services for businesses and users. Its primary purpose is to:

• Prevent gatekeepers from abusing their dominant position to harm smaller competitors and emerging companies, thereby ensuring fair competition.
• Guarantee that users have the freedom to choose between different services and are not locked into a specific digital ecosystem.
• Create an environment in which companies can innovate and compete on a level playing field, without fear of being driven out of the market by gatekeepers.

What are Apple and Meta’s breaches?

In Apple’s case, the European Commission has determined that Apple has been preventing app developers from freely informing users about alternative purchasing options outside the App Store. Additionally, it hinders the installation of third-party app stores. Brussels considers these restrictions unnecessary and disproportionate. Essentially, Apple does not allow developers to fully leverage alternative distribution channels, nor do consumers have access to more affordable offers.

On the other hand, the issue with Meta lies in its “consent or pay” model. The European Commission believes that this model does not offer a genuine alternative for users who do not want their personal data combined for personalized advertising. In other words, it does not allow for the free exercise of the right to consent.

Big Tech adaptation to comply with regulations

Both companies are obligated to make significant changes to their practices to comply with the DMA.

In Apple’s case, this involves removing the technical and commercial restrictions that prevent developers from informing about alternative offers outside the App Store.

In Meta’s case, despite introducing a new version of its personalized advertising model in November 2024, the European Commission is still assessing whether this new option meets the requirements of the DMA. The imposed fine refers to the period prior to this modification.

Key sanctions under the Digital Markets Act

The DMA is a powerful tool that seeks to ensure fairness in digital markets. The penalties for non-compliance can be severe:

• Fines of up to 10% of the company’s total annual worldwide turnover.
• In the event of repeated infringements, fines may increase to up to 20% of the company’s total annual worldwide turnover.

As for the next steps, Apple and Meta have a deadline of 60 days to comply with the European Commission’s decisions. Failure to do so will result in periodic penalty payments. The Commission will continue to collaborate with both companies to ensure they comply with the DMA.

Therefore, the DMA has put Apple and Meta in the spotlight. These first decisions of non-compliance set an important precedent and demonstrate that the European Commission is willing to take forceful measures to ensure that large technology companies comply with the rules and offer users fair and transparent options.