On Wednesday, the European Commission penalized technology corporations Apple and Meta for failing to adhere to the Digital Markets Act (DMA), potentially exacerbating existing trade frictions with the United States.
The major technology companies have responded by indicating their intention to challenge the penalties and portraying the European Union’s regulations as similar to tariffs.
The penalties fell at the less severe end of what the Commission was authorized to impose; nonetheless, the executive branch has concluded two investigations aimed at those very firms.
The Commission imposed a fine of €500 million on Apple after determining that they were obstructing developers from directly interacting with consumers and encouraging them to use alternate platforms for promotions and content.
In addition to the fine, the Commission issued a cease-and-desist order to guarantee proper adherence from Apple.
The executive imposed a €200 million fine on Meta, arguing that its “pay or consent” ad strategy does not align with the DMA because it presents a two-option decision that pressures users into agreeing to share their personal information for targeted ads, unless they opt for a paid subscription.
The imposed fines are comparatively modest when compared with EU regulations which allow penalties reaching up to 10% of yearly revenue for violations under the DMA. However, based on an official statement, factors such as “the severity, length, and frequency” of the infraction were considered during assessment. Additionally, because the DMA represents recent lawmaking, the aspect concerning the time frame was not applicable in this instance.
The Commission has concluded two investigations: one regarding Apple for not permitting alterations to the screen where users can choose their browsers; another after executives determined that Facebook Marketplace does not qualify as a primary platform service under the DMA regulations.
According to EU Competition Commissioner Teresa Ribera’s statement, “Both Apple and Meta have failed to meet the requirements set forth by the DMA through strategies that increase reliance on their respective platforms for both businesses and consumers.”
Since his return to power and backed by Big Tech CEOs, US President Donald Trump has put pressure on the EU over its digital regulations, accusing the Commission of taxing US tech enterprises.
The European Union maintains that both the DMA and its companion legislation, the Digital Services Act (DSA), represent neutral, nondiscriminatory rules which are not open to negotiation within the framework of discussions about trade tariffs. However, the U.S. administration has indicated that they consider these acts as nontariff impediments to commerce that ought to be part of those deliberations.
Apple has announced it intends to appeal the Commission fine. “Today’s announcements are yet another example of the European Commission unfairly targeting Apple in a series of decisions that are bad for the privacy and security of our users, bad for products, and force us to give away our technology for free,” an Apple representative commented.
The European Commission is trying to undermine successful American enterprises while permitting Chinese and European firms to function under distinct regulations,” asserted Joel Kaplan, Meta’s Chief Global Affairs Officer. He further stated, “This issue goes beyond mere fines; the Commission compelling us to alter our business approach essentially levies a multibillion-dollar tax on Meta while necessitating we provide a subpar service.
Apple and Meta must adhere to the Commission’s rulings within 60 days; otherwise, they face potential recurring fines.
The penalty levied against Meta applies to the timeframe between March 2024 and November 2024. During this interval, the firm implemented modifications to its advertising system; these alterations continue to be evaluated by European regulators.
As a final resort, the Commission has accused Apple of not adhering to the Digital Markets Act (DMA) by preventing users from accessing alternative app stores and directly downloading applications from the internet. Investigations into this matter are still ongoing.
