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EU Launches Investigation Into Tech Titans for Monopoly Practices

The multibillion-dollar companies could face fines of up to 10 percent of their global revenue.

Meta CEO Mark Zuckerberg testifies before the Senate Judiciary Committee at the Dirksen Senate Office Building on January 31, 2024, in Washington, D.C.

The European Commission signaled Monday that it has no intention of waiting for powerful tech companies to change their practices in order to comply with a landmark anti-monopoly law passed by the European Union earlier this month, as officials informed Apple, Facebook parent company Meta, and Google parent company Alphabet that they were being investigated for potential violations.

“The law is the law,” Thierry Breton, E.U. commissioner for internal market, told reporters at a press conference in Brussels announcing the probe. “We can’t just sit around and wait.”

The commission told the tech giants it is investigating whether Apple and Alphabet are complying with the Digital Markets Act’s (DMA) measure requiring companies to allow users to be directed to offers available outside the firms’ own app stores. The two companies may be imposing “various restrictions and limitations” on users to unfairly favor their own stores, including by charging fees to prevent apps from promoting offers outside the Apple and Google app stores.

The commission is investigating Meta’s practice of allowing users to pay a monthly fee for ad-free versions of Facebook and Instagram, which allow them to avoid having their personal data used for ad-targeting.

“The commission is concerned that the binary choice imposed by Meta’s ‘pay or consent’ model may not provide a real alternative in case users do not consent, thereby not achieving the objective of preventing the accumulation of personal data by gatekeepers,” said the European Commission.

Margrethe Vestager, executive vice president of the commission, said in Brussels that the companies have announced some steps to comply with the DMA, which took effect on March 7, but that some of the measures “fail to achieve their objectives and fall short of expectations.”

Compliance “is something that we take very seriously,” said Vestager.

The DMA identifies Alphabet, Apple, and Meta as three of six digital “gatekeepers” that are required to end anti-competition practices. New regulations require the companies to allow third parties to operate with the gatekeepers’ own services, allow business users to access the data they generate when using the companies’ platforms, allow users to un-install any pre-installed software or app if they choose to, and treat their own services and products equally to those offered by third parties.

The commission has 12 months to complete the investigations and could fine the multibillion-dollar companies up to 10% of their global revenue if they find them to be in violation of the DMA.

John O’Brennan, professor of European politics at Maynooth University in Ireland, said the investigation signals that “the days of these tech giants exploiting monopoly positions in different markets are over.”

The E.U. fined Apple $1.8 billion earlier this month for suppressing competition from rival music streaming apps such as Spotify. The company is also under scrutiny in the U.S., with the Department of Justice joining 16 states last week in filing a lawsuit accusing Apple of illegally monopolizing the smartphone market.

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