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EU Commission announcing a series of investigations against big tech

“Governments” are announcing actions against big tech companies in a struggle about power and control. The EU Commission says it will investigate if Alphabet, Apple and Meta operate in accordance with the EU’s new Digital Markets Act. The Commission’s announcement also addresses Microsoft and Amazon. US government a few days ago announced a court case against Apple saying the company’s power is used to distort competition. US government has also ongoing cases against Amazon, Meta and Alphabet. 

The Commission’s now announced investigation are about: 

  • Alphabet’s rules on steering in Google Play and self-preferencing on Google Search, 
  • Apple’s rules on steering in the App Store and the choice screen for Safari and
  • Meta’s “pay or consent model”.

The Commission says it suspects that the measures put in place by these gatekeepers fall short of effective compliance of their obligations under the DMA.

In addition, the Commission says it has launched investigatory steps relating to Apple’s new fee structure for alternative app stores and Amazon’s ranking practices on its marketplace. 

Alphabet’s and Apple’s steering rules

The Commission is investigating if measures implemented by Alphabet and Apple form app stores are in breach of the DMA. DMA requires gatekeepers to allow app developers to “steer” consumers to offers outside the gatekeepers’ app stores, free of charge.

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“The Commission is concerned that Alphabet’s and Apple’s measures may not be fully compliant as they impose various restrictions and limitations. These constrain, among other things, developers’ ability to freely communicate and promote offers and directly conclude contracts, including by imposing various charges.”

Alphabet’s measures to prevent self-preferencing

The Commission is investigating if Alphabet’s display of Google search results may lead to self-preferencing in relation to Google’s vertical search services (e.g., Google Shopping; Google Flights; Google Hotels) over similar rival services.

“The Commission is concerned that Alphabet’s measures implemented to comply with the DMA may not ensure that third-party services featuring on Google’s search results page are treated in a fair and non-discriminatory manner in comparison with Alphabet’s own services”, as required by the DMA.

Apple’s compliance with user choice obligations

The Commission has opened proceedings against Apple regarding their measures to comply with obligations to  enable end users to easily uninstall any software applications on iOS,  easily change default settings on iOS and  prompt users with choice screens which must effectively and easily allow them to select an alternative default service, such as a browser or search engine on their iPhones.

The Commission is concerned that Apple’s measures, including the design of the web browser choice screen, may be preventing users from truly exercising their choice of services within the Apple ecosystem, in contravention of the DMA.

Meta’s “pay or consent” model

The Commission is investigating if Meta’s recently introduced “pay or consent” model for users in the EU complies with DMA which requires gatekeepers to obtain consent from users when they intend to combine or cross-use their personal data across different core platform services.

“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.”  

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The Commission is also taking other investigatory steps to gather facts and information to clarify whether:

  • Amazon may be preferencing its own brand products on the Amazon Store in contravention  of the DMA, and
  • Apple’s new fee structure and other terms and conditions for alternative app stores and distribution of apps from the web (sideloading) may be defeating the purpose of its obligations under the DMA.

The Commission has also adopted five retention orders addressed to Alphabet, Amazon, Apple, Meta, and Microsoft, asking them to retain documents which might be used to assess their compliance with the DMA obligations, so as to preserve available evidence and ensure effective enforcement.

The Commission says it intends to conclude the proceedings opened today within 12 months. In case of an infringement, the Commission can impose fines up to 10% of the company’s total worldwide turnover. Such fines can go up to 20% in case of repeated infringement. 

In case of systematic infringements, the Commission may also adopt additional remedies such as obliging a gatekeeper to sell a business or parts of it, or banning the gatekeeper from acquisitions of additional services related to the systemic non-compliance.

The DMA aims to ensure fair markets in the digital sector. It regulates so-called gatekeepers, which are large digital platforms that provide an important gateway between business users and consumers, whose position can grant them the power to create a bottleneck in the digital economy.

Alphabet, Amazon, Apple, ByteDance, Meta and Microsoft, are the six gatekeepers and they must fully comply with all DMA obligations since 7 March 2024. 

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