From www.theverge.com

The European Commission is opening five non-compliance investigations into how Apple, Google, and Meta are complying with its new Digital Markets Act antitrust rules, the regulator announced today. “We suspect that the suggested solutions put forward by the three companies do not fully comply with the DMA,” the EU’s antitrust chief Margrethe Vestager said in a statement. “We will now investigate the companies’ compliance with the DMA, to ensure open and contestable digital markets in Europe.”

In particular, the Commission plans to investigate Google and Apple’s anti-steering rules in their app stores and whether Google is guilty of self-preferencing its own services within its search engine. Apple’s browser choice screen for iOS is also being investigated as well as Meta’s “pay or consent model” for ad targeting. In a press conference, the Commission said it plans to conclude the investigations within the next 12 months.

Additionally, the EU regulator is also looking into the fee structure Apple announced for distributing apps outside of the App Store, as well as whether Amazon is self-preferencing its own products on its store. The Commission has also announced that Meta has been given an additional six months to make Messenger interoperable with other messaging services.

“We are not convinced that the solutions by Alphabet, Apple and Meta respect their obligations for a fairer and more open digital space for European citizens and businesses,” EU Commissioner Thierry Breton said in a statement. “Should our investigation conclude that there is lack of full compliance with the DMA, gatekeepers could face heavy fines.”

Following the investigation, the Commission will tell each gatekeeper what must be done to address concerns, as well as what measures the regulator is planning to take. If found not to be in compliance, the Commission can fine each company up to 10 percent of their annual global revenue under the DMA, or even 20 percent in cases of “repeated infringement.”

Earlier this month, the six major tech companies designated as gatekeepers under the DMA had to start complying with its rules. These include having to give customers the option of changing default apps and uninstalling the gatekeeper’s pre-installed applications, a ban on ranking a gatekeeper’s first-party services higher than rivals, and allowing third-party app stores.

The EU’s antitrust chief Margrethe Vestager previously indicated to Reuters that the Commission would be taking a closer look at how Apple is complying with the regulation over concerns that it may “de facto not make it in any way attractive to use the benefits of the DMA.”

The announcement follows fierce criticism of how Apple in particular is complying with the Digital Markets Act. Although the company is allowing alternative app stores on iOS as required by the new rules, it’s doing so with a new fee structure that its critics claim will dissuade developers from distributing apps outside of Apple’s App Store. Spotify called Apple’s compliance “a complete and total farce” while Epic CEO Tim Sweeney called the changes “a new instance of Malicious Compliance.”

Meta’s “pay or consent model” has also been the subject of complaints from various EU watchdogs. Last year, it launched a new paid tier for Facebook and Instagram in the EU that allows users to pay €9.99 a month to use each service without ads. The subscription was designed to be a way to get user consent to collect their data if they decide not to pay, but the Commission is concerned with the “binary choice” that Meta is offering. Last week, Meta said it had offered to reduce the monthly price of ad-free access to €5.99 a month to appease regulators.

In a series of statements, Apple, Meta, Google, and Amazon defended their approaches to complying with the DMA, and said they’ll continue to work with the Commission to address its concerns.

“We’re confident our plan complies with the DMA, and we’ll continue to constructively engage with the European Commission as they conduct their investigations,” Apple spokesperson Julien Trosdorf said in a statement to The Verge.

“Subscriptions as an alternative to advertising are a well-established business model across many industries,” Meta spokesperson Matt Pollard said. “We will continue to engage constructively with the Commission.”

“To comply with the Digital Markets Act, we have made significant changes to the way our services operate in Europe,” Google’s competition director Oliver Bethell said, adding that the company has “engaged with the European Commission, stakeholders and third parties in dozens of events over the past year to receive and respond to feedback.” Bethell said Google will defend its approach.

“Amazon is compliant with the Digital Markets Act and has engaged constructively with the European Commission on our plans since the designation of two of our services,” Amazon spokesperson Sam Barratt said in a statement. “We continue to work hard every day to meet all of our customers’ high standards within Europe’s changing regulatory environment.”

Update March 25th, 9:36AM ET: Added responses from Apple, Meta, Google, and Amazon.

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The post Apple, Meta, and Google targeted by EU in DMA non-compliance investigations first appeared on www.theverge.com

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