Alphabet, Apple and Meta were notified by European Union regulators on Monday that they were being investigated for a variety of potential violations of the region's new competition laws.
The investigation is the regulator's first announcement since the Digital Markets Act came into effect on March 7, signaling the bloc's intention to strictly enforce its comprehensive competition rules. The law requires Alphabet, Apple, Meta and other tech giants to open up their platforms to give smaller competitors greater access to users, potentially affecting app stores, messaging services, Internet search, social media and online shopping. It may have an impact.
The investigation in Brussels adds to the regulatory scrutiny facing the largest technology companies and shows a growing consensus between the United States and Europe about the need to crack down on companies for anti-competitive behavior.
Last week in Washington, the Justice Department sued Apple for violating antitrust laws with practices designed to reduce the likelihood of customers relying on iPhones and switching to competing devices. Amazon, Google, and Meta also face federal antitrust lawsuits.
EU investigators are looking into whether Alphabet, the parent company of Apple and Google, unfairly favors its own app stores to drive out competitors, particularly restrictions that limit how app developers can communicate with customers about sales and other offers. I said I wanted to do it. Google is also being investigated over its display of search results in Europe, and Meta is expected to be investigated over its new ad-free subscription service and its use of data to sell advertising.
The European Commission, the European Union's executive arm, can fine companies up to 10% of their global sales, worth hundreds of billions of dollars annually. The committee has 12 months to complete its investigation.
Companies have already announced a number of changes to their products, services and business practices to comply with the Digital Markets Act. But in announcing the investigation Monday, regulators said their changes did not go far enough.
“Certain compliance measures do not achieve their objectives and fall short of expectations,” said European Commission Vice President Margrethe Vestager, who announced the investigation at a press conference in Brussels. She said compliance with the law is “something we take very seriously.”
The investigation announced Monday reinforces a years-long campaign by European regulators to loosen the grip of the biggest tech companies over the digital economy. This month, Mr. Vestager announced a 1.85 billion euro ($2 billion) fine against Apple for unfair business practices related to the App Store. Amazon, Google and Meta have also come under EU scrutiny.
In an interview last month, Mr. Vestager said the United States and the European Union were working more closely together on the need to regulate the technology sector than a few years ago, when he was accused of unfairly targeting American companies. She said European regulators had communicated with their counterparts in Washington to “share notes.”
“I don’t think cooperation has gotten better in a long time,” she said.
The Digital Markets Act, first passed in 2022, gives European regulators more power to force tech giants to change their business practices without the tedious process of filing traditional antitrust lawsuits that can take years to resolve. This is to do it. A key aspect of the law is that a company cannot favor its own services over similar products offered by competitors.
As part of the investigation, Alphabet, Apple and Meta will now be required to disclose additional information about their business practices to regulators. The companies said they made changes to comply with the new rules.
Among the changes, Apple announced in January that developers will have new ways to reach European Union customers, including allowing them to use external app stores on iPhone and iPad for the first time. Google also made changes to its product, including how it displays search results for flights, hotels, and shopping services.
Meta has created a new subscription service that allows EU users to pay €13 per month if they want to use Facebook and Instagram without ads. Regulators said the policy essentially forces users to pay a fee or agree to have their personal data used for targeted advertising.
“The Commission is concerned that the binary choice imposed by Meta’s ‘pay or consent’ model may fail to provide users with real alternatives if they do not consent,” the Commission said in a statement.
“We will continue to work constructively with the committee,” Mehta said. Apple said, “We showed flexibility and responsiveness by listening to and reflecting feedback from the European Commission and developers.” Oliver Bethell, Google's director of competition, said the company “will continue to defend our approach over the coming months.”
Many in the tech industry have wondered how aggressively EU regulators will enforce new competition laws. In Brussels, tech companies have been participating in workshops on how the rules will be enforced. At the same time, many app developers, competitors and consumer groups have complained to regulators that the changes the company has made so far haven't gone far enough.
“Today’s opening of investigations into Meta, Google and Apple is a clear signal that the Commission means business in enforcing digital markets law,” said Monique Goyens, Secretary-General of the European Consumer Organization in Brussels. ) said. Technology industry.
On Monday, regulators said they were gathering information about Amazon's compliance with the Digital Markets Act. Regulators said the company could be breaking the law by favoring its own branded products in its online stores.