EU launches probe of Apple, Google, Meta compliance with new digital law

The EU has hit Apple, Google parent Alphabet and Meta with the first-ever probes under a mammoth digital law, which could lead to big fines against the US giants.

Among six firms named as market "gatekeepers" under the EU's landmark Digital Markets Act — along with Amazon, TikTok owner ByteDance and Microsoft — the companies have been obliged to comply with the new law 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 the EU's internal market commissioner, Thierry Breton on Monday.

In a statement announcing the probes, the European Commission, the EU's antitrust regulator, said it suspects the measures the firms have put in place so far "fall short of effective compliance."

Under the new rules, the commission can impose fines of up to 10 percent of a company's total global turnover. This can rise to up to 20 percent for repeat offenders. In extreme circumstances, the EU can order the break up of companies.

Self-preferencing

Unlike the traditional rules that saw probes last for years, the DMA demands regulators complete any investigation within 12 months of its start.

One of the main tech lobbying groups, CCIA, whose members include the three giants targeted, lambasted the probes, accusing the EU of "jumping the gun" and acting too hastily.

Monday's probes are focused on whether Alphabet's Google Play and Apple's App Store are allowing app developers to show consumers offers, free of charge, outside of those app marketplaces.

The commission fears that the measures the two companies have taken may not be fully compliant since they impose "various restrictions and limitations".

Alphabet is also under suspicion over whether Google search results favour its own services — for example, Google Shopping or Google Flights — over rivals.

The EU slapped a whopping $2.6 billion (2.4-billion-euro) fine on Google in 2017 over similar claims of self-preferencing.

Ensuring options

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, the 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.

In addition, Meta has faced an avalanche of legal problems in the EU over its data processing, including a 1.2 billion euro fine last year for data privacy breaches.

Meta defended its scheme. "We designed Subscription for No Ads to address several overlapping regulatory obligations, including the DMA," a spokesperson said.

In an additional move, EU regulators will also explore whether Amazon may be favouring its own brand products on the Amazon Store and whether Apple's new fee structure for alternative app stores "may be defeating the purpose" of its DMA obligations.