The Europen Union on Monday announced it had launched investigations into Apple, Google parent Alphabet and Meta in the first probes under a new sweeping law designed to stop Big Tech companies from cornering digital markets.
The European Commission, the 27-nation bloc's executive arm, said it was investigating the companies for "non-compliance" with the Digital Markets Act (DMA).
The Digital Markets Act that took full effect earlier this month is a broad rulebook that targets Big Tech "gatekeeper" companies providing "core platform services." They include six of the world's biggest tech firms, namely Alphabet, Amazon, Apple, TikTok owner ByteDance, Meta and Microsoft.
Those companies must comply with a set of do's and don'ts, under threat of hefty financial penalties or even breaking up businesses. The rules have the broad but vague goal of making digital markets "fairer" and "more contestable" by breaking up closed tech ecosystems that lock consumers into a single company's products or services.
The commission has heard complaints that tech companies' measures to comply have fallen short, European Commission Vice President Margrethe Vestager, the bloc's competition chief, said at a press briefing in Brussels.
"Today, we decided to investigate a number of these suspected non-compliance issues. And as we unearth other problems, we will tackle those too."
The companies have been ordered to hold on to certain documents that the commission can access in current and future investigations, she said.
'Worrying signal'
The probes send a "worrying signal," one of the main tech lobbying groups said after the European Commission announced the decision.
"The timing of these announcements, while the DMA compliance workshops are still ongoing, makes it look like the commission could be jumping the gun," said the head of CCIA Europe, Daniel Friedlaender.
"As we all know, data takes time to collect. What we see now, however, sends a worrying signal that the EU might rush into investigations without knowing what they're investigating," Friedlaender added.
CCIA's members include Apple, Google and Meta.
Vestager pushed back at the CCIA's claim.
"We take stakeholder input as an important input. But of course, it is up to us to make the decision about opening cases. It's for us to prove that something is wrong here," she told reporters in Brussels.
"I definitely do not think that this is rushed. I think it is very timely, reflecting the promises that have been given and the law that has been passed," she added.
Various restrictions, limitations
Regulators are looking into whether Google and Apple are fully complying with the DMA's rules requiring tech companies to allow app developers to direct users to cheaper options available outside their app stores.
The commission said it's concerned the two companies are imposing "various restrictions and limitations," including charging recurring fees that prevent apps from freely promoting offers.
Google is also facing scrutiny for not complying with DMA provisions that prevent tech giants from giving preference to their own services over rivals. The commission said it is concerned Google's measures will result in third-party services listed on Google's search results page not being treated "in a fair and non-discriminatory manner."
Google said that it has made "significant changes" to the way its services operate in Europe to comply with the DMA.
"We will continue to defend our approach in the coming months," Google's director of competition, Oliver Bethell, said.
The commission is also investigating whether Apple is doing enough to allow iPhone users to easily change web browsers.
Apple said it's confident that its plan complies with the DMA, and it will "continue to constructively engage with the European Commission as they conduct their investigations." The company said it has created a wide range of new developer capabilities, features, and tools to comply with the regulation.
The commission is also looking into Meta's option for European users to pay a monthly fee for ad-free versions of Facebook or Instagram, so they can avoid having their personal data used to target them with online ads.
"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," it said.
Meta said it will "engage constructively" with the commission.
"Subscriptions as an alternative to advertising are a well-established business model across many industries, and we designed Subscription for No Ads to address several overlapping regulatory obligations, including the DMA," it said in a prepared statement.
The commission said it aims to wrap up its investigations within 12 months.