According to a Reuter’s report, the European Commission believes that some gatekeepers’ implemented procedures do not fully comply with the statute.
TakeAway Points:
- EU probes Apple, Google, and Meta under new digital law
- According to the report, the commission has the authority to punish companies for up to 10% of their total global turnover under the new regulations.
- However, the three major IT corporations that are the targets of one of the major lobbying groups, CCIA, blasted the investigations and charged that the EU was “jumping the gun” and moving too quickly.
EU probes top IT companies
Amazon, Microsoft, TikTok’s owner, ByteDance, and three other corporations that provide services like search engines, social networks, and chat apps used by other businesses are among the six businesses designated as market “gatekeepers” under the EU’s historic Digital Markets Act. These businesses have been required to abide by the new legislation since March 7.
“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 Thierry Breton,the EU’s internal market commissioner.
The European Commission, the EU’s antitrust authority, stated in a statement announcing the investigations that it believes the steps the companies have taken thus far “fall short of effective compliance.”
The EU competition enforcer will look into the policies of Apple about steering in the App Store, the choice screen for Safari, Meta’s “pay or agree model,” Alphabet over steering in Google Play, and self-preferencing on Google Search.
The three major IT corporations that are the targets of one of the major lobbying groups, CCIA, blasted the investigations and charged that the EU was “jumping the gun” and moving too quickly.
Margrethe Vestager, the EU’s commissioner for competition, stated that authorities had “absolutely” not hurried to look into the corporations.
Although there have been reforms, senior authorities feel they have not gone far enough.
According to the report, the commission has the authority to punish companies for up to 10% of their total global turnover under the new regulations. Recidivism can increase this by as much as 20 percent.
The EU has the authority to mandate the dissolution of businesses in dire situations.
In contrast to the previous regulations, which allowed investigations to drag on for years, the DMA requires authorities to wrap up any investigation within a year of its beginning.
Fears for Restriction
The investigation on Monday is centred on determining whether Alphabet’s Google Play and Apple’s App Store permit app developers to display free offers to users outside of those app marketplaces.
The commission is concerned that because the two corporations’ actions impose “different constraints and limitations,” they could not be entirely compliant. Alphabet is also being questioned about whether Google search results benefit its own services over competitors, such as Google Shopping and Google Flights.
In 2017, the European Union fined Google a staggering 2.4 billion euros ($2.6 billion) for identical self-preferencing claims.
Oliver Bethell, Google’s director of competition, said Google had made “significant changes to the way our services operate in Europe. We will continue to defend our approach in the coming months.” Bethell added.
Apple said that it was “certain” that its strategy complied with the DMA.
Concerns about consent
Apple is also under the spotlight over whether it allows users to easily uninstall apps on its iOS operating system and the design of the web browser choice screen.
Under the DMA, gatekeepers must offer choice screens for web browsers and search engines to ensure users have more options.
Meta also faces problems over its ad-free subscription model, which has already been targeted by three complaints since it launched in November.
European users can pay to avoid being tracked for advertising, but officials were not convinced.
“We have serious doubts that this consent is really free when you are confronted with a binary choice,” Breton told reporters.
Due to data processing issues, Meta has encountered a plethora of legal issues in the EU, including a fine of 1.2 billion euros for violating data privacy last year. Meta defended their plan. The DMA is one of the overlapping regulatory duties that we addressed when designing Subscription for No Ads, a spokeswoman stated.
Digging More into Apple
Furthermore, EU authorities will investigate if Apple’s new price structure for alternative app stores “may be contradicting the objective” of Apple’s DMA requirements, and if Amazon is preferring its own brand products on the Amazon Store. According to an Amazon representative, the company complies with the DMA.
The announcement on Monday adds to Apple’s already daunting legal difficulties on both sides of the Atlantic. Apple was accused of having a monopoly in the smartphone market when the US Department of Justice filed a lawsuit against the corporation last week.
That occurred only a few weeks after the iPhone manufacturer was fined 1.8 billion euros by the EU for restricting customers from accessing less expensive music streaming services. Apple declared that it would challenge the EU fine.
