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The European Union (EU) is set to launch investigations into several tech companies, including bigwigs like Google, Meta, and Apple, to see if they are adhering to new laws to curb the influence of big tech. If the EU finds them negligent, these companies will face massive fines that will significantly impact them.
Sources familiar with the matter reveal that the European Commission is preparing to unveil probes into both companies under the EU’s Digital Markets Act in the imminent future.
According to these insiders, who requested anonymity, the focus of the investigations will encompass the new fees, terms, and conditions set by Apple and Google for developers in their respective app stores.
Additionally, there’s speculation that Meta Platforms Inc.’s proposal to introduce a subscription fee for users to access these platforms without advertisements could attract scrutiny under the EU’s expanded regulatory powers.
The intensified scrutiny from the EU coincides with legal action taken against Apple by the US Justice Department and 16 state attorneys general.
They filed a lawsuit on Thursday, alleging antitrust violations by Apple for impeding rivals’ access to hardware and software features on its devices. This development prompted a decline in Apple’s shares by as much as 3.8% during Thursday’s trading, with Alphabet also experiencing a decrease of up to 1.2%.
The Digital Markets Act empowers the EU to impose significant penalties, including fines of up to 10% of a company’s total annual global revenue and double that for repeated violations. Regulators aim to conclude their investigations within 12 months after initiating formal inquiries.
The European Commission and Meta declined to comment on the matter, while Apple and Google have yet to respond to requests for comments.
Apple, having recently been fined €1.8 billion ($2 billion) by the EU for obstructing music streaming apps from informing users about cheaper alternatives, has faced heightened scrutiny since the full implementation of the Digital Markets Act on March 7th.
In response to Apple’s proposed changes under the Digital Markets Act, Spotify, which catalyzed the initial complaint against Apple regarding its App Store practices, criticized the additional charges proposed by Apple as “unacceptable” and “nonsensical.” Spotify has requested a meeting with Margrethe Vestager, the EU’s competition chief, to discuss its concerns. Apple’s proposal involves eliminating the 30% commission that was historically imposed while introducing new charges, a contentious move by industry observers.
