Compliance

EU launches non-compliance investigations of Apple, Meta, and Alphabet

They’re the first probes under the European Union’s sweeping Digital Markets Act.
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· 3 min read

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The big three could be in for some big trouble abroad.

Apple, Meta, and Alphabet are all under investigation by the European Union, adding to a growing cluster of regulatory hurdles for the tech giants.

The investigations mark the first probes under the EU’s new Digital Markets Act, a law that took effect earlier this March with the aim of encouraging competition from smaller tech companies.

If the tech giants are found to be in violation of the new rules, they could be fined up to 10% of their global revenue, with the potential of fines up to 20% for “repeated infringements,” per the EU. The probes were set in motion after the EU deemed solutions proposed by Apple, Meta, and Alphabet insufficient.

“We suspect that the suggested solutions put forward by the three companies do not fully comply with the DMA,” Margrethe Vestager, the EU’s EVP in charge of competition policy, said in a statement.

Those initial compliance plans were presented last week, the Wall Street Journal reported. The regulatory body plans to conclude its investigations within the next year.

The first probe concerns Alphabet and Apple’s compliance with the DMA’s anti-steering rules, which dictate that tech companies can’t block users from seeing information about alternative offers outside of their app stores.

Another probe investigates whether or not Apple obeys rules that dictate users can easily change default settings and remove software applications on their devices. An additional probe seeks to determine if Alphabet’s “display of Google search results may lead to self-preferencing in relation to Google’s vertical search services…over similar rival services.”

The final probe looks at Meta’s “pay or consent” model, an ad-free subscription tier the company introduced for Facebook and Instagram users in Europe last year.

“The Commission 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 objective of preventing the accumulation of personal data by gatekeepers,” the EU explained.

More probes loom on the horizon. As part of the Digital Markets Act, the EU designated six gatekeepers—Alphabet, Amazon, Apple, ByteDance, Meta, and Microsoft—which have six months to “ensure full compliance with the DMA obligations for each of their designated core platform services,” the EU previously noted.

The EU was careful to note that other companies’ proposed compliance plans could fall short as well. In its statement, the Commision said it’s also taking “investigatory steps” to determine if Amazon intentionally boosts its own products on its marketplace.

For giant tech companies, the message from the EU is clear: All eyes on you.

News built for finance pros

CFO Brew helps finance pros navigate their roles with insights into risk management, compliance, and strategy through our newsletter, virtual events, and digital guides.