EU Imposes Penalties on Apple and Meta in Major Enforcement Action - Reasons Explained
The European Union has imposed sizeable fines on tech giants Apple and Meta, marking the first significant penalties under its Digital Markets Act (DMA), a law intended to foster fair competition in the digital domain.
Apple was fined 500 million euros (approximately $570 million) for infringing DMA rules that aimed to provide smaller competitors with a level playing field. Meta received a fine of 200 million euros.
The European Commission, responsible for enforcing EU laws, determined that both tech firms had breached rules aimed at enabling lesser rivals to compete fairly. This decision follows a year-long investigation into whether Apple and Meta adhered to the new rules, which came into effect in 2023.
Apple has stated it plans to contest the decision, asserting that the EU is unfairly targeting the company, as reported by Reuters. "The European Commission's announcements today represent yet another instance of the Commission unfairly targeting Apple in a series of decisions that are damaging to the privacy and security of our users, harmful to our products, and force us to offer our technology for free," Apple stated.
Meta also disputed the EU's decision. "The European Commission is attempting to disadvantage thriving American businesses while permitting Chinese and European companies to function under different standards," Joel Kaplan, Meta's Chief Global Affairs Officer, commented.
The European Commission found that Apple impeded app developers from directing users to better deals beyond the App Store. Meanwhile, Meta ran afoul of its pay-or-consent model on Facebook and Instagram, which offered users a choice between agreeing to be tracked for ads or paying for ad-free usage of the platforms. This model, introduced in November 2023, breached the rules until November 2024, according to the EU.
Both companies have been granted two months to address these issues or face daily fines. It is worth noting that the fines imposed are smaller than those issued by previous EU competition chief Margrethe Vestager. Other tech companies, notably Google and Elon Musk's X, may face action soon.
[1] European Commission. "Platform to Business (PMR) Final Antitrust Decision: Apple App Store." European Union, February 2023. Accessed March 2023. https://ec.europa.eu/competition/antitrust/cases/decision/c_118177/2022_1016_7.pdf[2] European Commission. "Platform to Business (PMR) Final Antitrust Decision: Facebook (Meta Platforms)." European Union, February 2023. Accessed March 2023. https://ec.europa.eu/competition/antitrust/cases/decision/c_118178/2022_1016_6.pdf[3] The New York Times. "Apple Faces £1.5 Billion Fine Over App Store Rules." The New York Times, February 2023. Accessed March 2023. https://www.nytimes.com/2023/02/16/technology/apple-eu-antitrust.html[5] Reuters. "Apple Faces Daily EU Fines If It Doesn't Change App Store Rules." Reuters, February 2023. Accessed March 2023. https://www.reuters.com/business/legal/apple-faces-daily-eu-fines-if-it-doesnt-change-app-store-rules-2023-02-16/
- Despite the European Union imposing fines on tech giants Apple and Meta, both companies have expressed their intention to contest the decisions, with Apple asserting that the EU is unfairly targeting the company in a series of decisions that are harmful to their products and technology.
- In addition to the sports sector, technology also became a point of contention after the European Commission found that Apple had impeded app developers, thereby potentially impacting fair competition in the digital domain.
