The European Commission is opening non-compliance investigations into Alphabet, Google’s parent company, Apple, and Meta under the Digital Markets Act, the institution announced on Monday (25 March).

The Digital Markets Act (DMA) is a landmark EU legislation that addresses competition in the digital space. Companies with a dominant position in crucial segments of the internet economy, such as the ones investigated, are deemed gatekeepers and have to act in a way that does not hinder competition.

“We suspect that the suggested solutions put forward by the three companies do not fully comply with the DMA,” Margrethe Vestager, the Commission’s executive vice-president in charge of competition policy, told a press briefing on Monday.

The investigations focus on steering rules in Google Play and Google Search, Apple’s App Store policies and choice screen, and Meta’s “pay or consent” model.

The Commission is also in a preliminary investigation into Amazon’s ranking practices and Apple’s new fee structure for alternative app stores.

Earlier in March, the Commission fined Apple €1.8 billion for anticompetitive behaviour and asked nine big tech platforms for information on how their generative AI practices comply with the Digital Services Act.

Last week, the Commission held a series of hearings with the big tech companies, looking into their compliance with the DMA. Microsoft is scheduled for a hearing tomorrow.

The Commission said on Monday it will conclude the investigations within the next month. However, Vestager is reportedly looking to finish the probes before the end of her term in November.

Penalties could be as high as 10% of each company’s global turnover.

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Alphabet

The Commission is concerned about Alphabet’s restrictions and charges on its app store, which hinder app developers from steering consumers to offers outside the stores without any charges. These limitations on the app store may not be DMA compliant as they limit developers’ ability to promote offers and conclude contracts freely.

The Commission is also investigating Alphabet’s display of Google search results to prioritise Google’s vertical search services, such as Google Shopping, over rivals.

These features may not ensure fair and non-discriminatory treatment of third-party services featured on Google’s search results page compared to Alphabet’s services.

Oliver Bethell, Director of Competition at Google told Euractiv that significant changes have been made to their services in Europe to adhere to the DMA.

“We have engaged with the European Commission, stakeholders and third parties in dozens of events over the past year to receive and respond to feedback, and to balance conflicting needs within the ecosystem. We will continue to defend our approach in the coming months,” he said.

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Apple

The Commission has similar concerns about Apple’s app stores.

Other obligations under investigation for Apple are whether the company that end users can easily uninstall any software applications on iOS, Apple’s operating system, easily change default settings on iOS, and prompt users with choice screens that effectively allow them to select alternative default services, such as browsers or search engines, on their iPhones.

The term ‘choice screen’ refers to an interface element or prompt that presents users with options to choose from. Under the DMA, a choice screen would be a screen that appears on an iPhone when a user is setting up or configuring certain features, such as selecting a default web browser or search engine.

The Commission’s concern is that Apple’s measures, including the design of the web browser choice screen, might hinder users from exercising their choice of services within the Apple ecosystem, which could be seen as a violation of the DMA.

An Apple spokesperson told Euractiv that their plan is DMA-compliant and that the company will cooperate with the investigations.

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Meta

In the case of Meta, the parent company of Facebook, Instagram, and Whatsapp, the Commission has initiated proceedings to investigate its “pay or consent” model introduced for users in the EU, which has been criticised since its introduction by organisations such as the European Consumer Organisation BEUC or Noyb, which also filed complaints against it.

The model gives users in the EU a choice between consenting to the use of their personal data for targeted advertising or paying for an ad-free experience on their platforms.

The Commission believes the model may not offer a genuine alternative if users choose not to consent.

Last Tuesday, Meta announced plans to reduce its monthly subscription fee from €9.99 to €5.99 for web users.

Thierry Breton, the EU commissioner for internal market, said the scheme aims to influence users into consenting, and that the Commission is also looking into the model under the DSA.

A Meta spokesperson told Euractiv that “subscriptions as an alternative to advertising are a well-established business model across many industries, and we designed Subscription for No Ads to address several overlapping regulatory obligations, including the DMA”.

The Commission is also investigating whether Amazon is prioritising its own brand products on the Amazon Store and whether Apple’s new fee structure for alternative app stores and distribution of apps from the web comply with the DMA.

It has issued retention orders to Alphabet, Amazon, Apple, Meta, and Microsoft to preserve evidence for DMA compliance assessment.

An Amazon spokesperson told Euractiv that the company is compliant with the DMA and has been cooperating with the Commission regarding its plans since two of its services were designated.

“We continue to work hard every day to meet all of our customers’ high standards within Europe’s changing regulatory environment,” the spokesperson said.

Meta has been granted a six-month extension to comply with interoperability obligations for Facebook Messenger while remaining subject to all other DMA obligations.

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