EU imposes EUR 700 million penalties on Apple and Meta for breaching digital law regulations
Rewritten Article:
The European Union dished out a whopping EUR 700 million in fines to tech giants Apple and Meta on Wednesday, for flouting digital competition rules, according to KUNA.
In a press bulletin, the European Commission declared that Apple had transgressed its anti-steering obligation under the Digital Markets Act (DMA), while Meta was found guilty of the same infraction, by ignoring consumer demands for a choice of a service that conserves their personal data privacy.
As a result, the Commission slapped Apple with a heavy fine of EUR 500 million and Meta with a fine of EUR 200 million.
The Commission's statement underscored that the decision followed lengthy discussions with both companies, during which they were given ample opportunity to present their views and arguments. Teresa Ribera, EU Commissioner for Clean, Just and Competitive Transition, said in the statement, "Today's decisions deliver a powerful message. The Digital Markets Act is an indispensable tool... It safeguards European consumers and ensures a competitive landscape."
Ribera went on to say, "Apple and Meta have fallen short of compliance with the law by implementing measures that reinforce the dependence of users and businesses on their platforms." She further added, "Consequently, we've taken decisive but balanced enforcement actions against both companies, based upon clear and predictable rules. Every company functioning within the EU must abide by our statutes and honor European principles."
Henna Virkkunen, European Commissioner for Tech Sovereignty, Security, and Democracy, confirmed that "the decisions adopted today establish that Apple and Meta have stripped users of this free choice, necessitating a change in their conduct." The statement emphasized that Apple and Meta are obliged to adhere to the decisions within 60 days, or they will be subject to recurring penalty payments.
Background Insights
Apple's Fines
- Allegations: Apple violated the DMA by hampering app developers from informing consumers about offers available beyond Apple’s App Store. This curbed the developers' ability to direct users to alternative payment systems or rival services, limiting consumer flexibility and competition.[1][2]
- Consequences: Apple faces a penalty of approximately €500 million. The company must revoke these restrictions to comply with the DMA. Notably, Apple asserts that the decision impairs user privacy and security and afflicts pressure to cede their technology.[2]
Meta's Fines
- Accusations: Meta breached the DMA by unveiling a “pay-or-consent” advertising model. Introduced in November 2023, this model compelled EU users of Facebook and Instagram to either consent to personalized advertising or purchase an ad-free subscription. This approach does not square with the DMA's requirements for offering services that minimize personal data usage without significant variation in functionality.[1][2]
- Results: Meta incurred a fine of approximately €200 million. To rectify, the company will need to modify its advertising model to allow users the option to choose services with less personalized data usage, without being compelled into a paid subscription for minimal functionality differences.[2]
These fines signify a significant stride in the EU's enforcement of digital competition rules. These rulings could inspire how other tech companies function within the European market, particularly regarding transparency, consumer choice, and data protection.
Moreover, these actions exemplify the EU's resolve to ensure large tech companies abide by the regulations dictated in the DMA, which will undoubtedly impact future business strategies and product offerings for these companies in Europe.
Meanwhile, X (formerly Twitter) avoids involvement in these fines but faces scrutiny under the Digital Services Act, another prominent EU regulation that focuses on content moderation and transparency.[3] The EU's approach showcases a broader endeavor to oversee and regulate the actions of major tech platforms operating within the region.
- The European Union fined tech companies Apple and Meta a collective EUR 700 million for violating digital competition rules as outlined by the Digital Markets Act (DMA).
- Apple was penalized EUR 500 million for interfering with app developers' ability to inform consumers about alternatives beyond the App Store, thereby hampering competition.
- Meta received a EUR 200 million fine for implementing a "pay-or-consent" advertising model that compelled EU users to accept personalized advertising or pay for an ad-free subscription, contradicting the DMA's requirements.
- EU Commissioner Teresa Ribera emphasized that these companies have reinforced user and business dependence on their platforms by implementing non-compliant measures.
- The fines set a significant precedent for tech companies operating within the European market, with a focus on transparency, consumer choice, and data protection.
- While X (formerly Twitter) avoids involvement in these fines, it faces scrutiny under the Digital Services Act, another EU regulation focused on content moderation and transparency, highlighting the EU's broader endeavor to oversee and regulate major tech platforms in the region.
