Apple Hit with €500 Million Penalty and Meta Faces €200 Million Fine for Violating EU Regulations

In a significant move, the European Union has imposed fines of €500 million on Apple and €200 million on Meta, marking the first enforcement actions under groundbreaking legislation designed to rein in the influence of Big Tech. As EU antitrust regulators take this decisive step, the implications for U.S. relations, particularly with former President Donald Trump, may become a point of contention; he has previously signaled intentions to impose tariffs on nations that penalize American firms.

This action follows an extensive year-long investigation by the European Commission into both companies’ adherence to the Digital Markets Act (DMA). The DMA aims to level the playing field, enabling smaller competitors to thrive in environments typically dominated by larger corporations. In response to the fine, Apple has announced its intention to contest the ruling.

Meta has also voiced its criticism regarding the EU’s decision. In a statement shared via email, the company remarked, “The European Commission is attempting to handicap successful American businesses while allowing Chinese and European companies to operate under different standards.” They further stated, “This isn’t just about a fine; the Commission is effectively imposing a multi-billion-dollar tariff on Meta while requiring us to offer an inferior service.” Joel Kaplan, Meta’s Chief Global Affairs Officer, added that the restrictions on personalized advertising would, in fact, harm European businesses and economies.

While the fines are substantial, they are relatively modest compared to penalties that were levied in the past by former EU antitrust chief Margrethe Vestager. Sources, who chose to remain anonymous, suggest that this leniency may be attributed to the brief duration of the breaches, a focus on compliance over punitive measures, and a strategic desire to mitigate possible backlash from U.S. authorities.

The competition watchdog within the EU has mandated that Apple remove any technical and commercial barriers that limit app developers from directing users toward more affordable options outside the App Store. Similarly, it identified that Meta’s pay-or-consent model, rolled out in November 2023, is in violation of the DMA. This model allows users of Facebook and Instagram who consent to tracking to utilize the service at no cost, funded by ad revenues, while offering them the option to pay for an ad-free experience.

Meta is currently in discussions with EU regulators regarding a revamped version of this model introduced last year. Both companies have been given a two-month window to comply with these directives or risk incurring daily penalties.

Interestingly, Apple previously avoided sanctions in a separate investigation relating to its web browser practices on iPhones, having made adjustments that facilitate user transitions to alternative browsers and search engines. This move allowed regulators to close that investigation, characterizing Apple’s changes as compliant with DMA criteria. However, the iPhone manufacturer has still been charged for infringing DMA regulations by impeding users from sideloading apps—a process enabling the download of alternative app stores and applications from the web. The EU has criticized Apple’s imposition of a new fee, termed the Core Technology Fee, for acting as a deterrent against developers exploring alternative distribution channels on iOS.

In another development, the EU regulator has decided to revoke Meta’s Marketplace’s classification as a DMA gatekeeper, noting that its user volume has fallen below the mandated threshold.

EU antitrust chief Teresa Ribera commented, “We have taken firm but balanced enforcement action against both companies, based on clear and predictable rules. All companies operating in the EU must follow our laws and respect European values.” Meanwhile, EU lawmaker Andreas Schwab has urged the Commission to maintain its scrutiny of Google’s lucrative advertising technology sector and Elon Musk’s platform, X, emphasizing the necessity for rigorous enforcement to uphold the integrity of competition policies: “There can be no leeway in enforcement, as this may also impact the importance of competition policy in general.” He warned that decisions potentially influenced by trade policy could pose risks to the overall cohesion of the European Union.

These actions underscore the EU’s commitment to fostering a competitive marketplace while highlighting the ongoing struggles between regulatory bodies and major tech firms. As we navigate these uncharted waters, the focus remains on achieving equitable standards for all players in the sector.

Edited By Ali Musa
Axadle Times International – Monitoring.