EU targets Alphabet, Apple and Meta in wide-ranging probes
EU targets Alphabet, Apple and Meta in wide-ranging probes

Alphabet, Apple and Meta were told by European Union regulators on Monday that they were being investigated for a range of potential breaches of the region’s new competition law.

The inquiries are the first that regulators have announced since the Digital Markets Act came into force on March 7, and signal the bloc’s intention to strictly enforce comprehensive competition rules. The law requires Alphabet, Apple, Meta and other tech giants to open up their platforms so that smaller rivals have greater access to their users, potentially affecting app stores, messaging services, internet search, social media and online shopping.

The Brussels investigations add to the regulatory scrutiny facing the world’s biggest technology companies. Last week in Washington, the Justice Department sued Apple for violating antitrust laws with practices intended to make customers rely on their iPhones and less likely to switch to a competing device. Google and Amazon also face federal antitrust lawsuits.

The EU investigations focus on whether Apple and Alphabet, Google’s parent company, unfairly favor their own app stores to crowd out competitors, particularly restrictions that restrict how app developers can communicate with customers about sales and other offers. Google is also being investigated over the display of search results in Europe, while Meta will be questioned about a new ad-free subscription service and its use of data to sell ads.

The European Commission, the European Union’s executive body, can fine companies up to 10 percent of their global revenues, which each amount to hundreds of billions of dollars a year. The commission has 12 months to complete its investigations.

Companies have already announced a number of changes to their products, services and business practices to try to comply with the Digital Markets Act. But in announcing the investigations on Monday, regulators said their changes did not go far enough.

“Some compliance measures fail to achieve their objectives and fall short of expectations,” said Margrethe Vestager, executive vice president of the European Commission, who announced the investigations at a news conference in Brussels. Compliance with the law, she said, “is something we take very seriously.”

The investigations reinforce a long-running campaign by European regulators to loosen the grip of the biggest tech companies on the digital economy. This month, Ms. Vestager announced a 1.85 billion euro ($2 billion) fine against Apple for unfair business practices related to the App Store. Google and Meta have also been subject to EU investigations.

The Digital Markets Act, first passed in 2022, was intended to give European regulators more power to force tech giants to change their business practices without the lengthy process of filing traditional antitrust cases, which can take years to resolve. A key aspect of the law is that companies cannot favor their own services over similar products offered by competitors.

As part of the investigations, Alphabet, Apple and Meta will now have to disclose more information to regulators about their business practices. The companies said they have made changes to comply with the new rules.

Among the changes, Apple announced in January that developers would have new ways to reach customers in the European Union, including allowing third-party app stores to be available on iPhone and iPad for the first time. Google has also made changes to its products, including how it displays search results for flights, hotels and shopping services.

Meta has launched 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 either pay a fee or agree to have their personal data used to target ads.

“The commission is concerned that the binary choice imposed by Meta’s ‘pay or consent’ model may not provide a real alternative in the event that users do not consent,” the commission said in a statement.

A Meta spokesman said it “will continue to engage constructively with the committee”. Apple said it had “demonstrated flexibility and responsiveness to the European Commission and developers by listening to and incorporating their feedback.” Oliver Bethel, Google’s director of competition, said the company would “continue to defend our approach in the coming months.”

Many in the tech industry wondered how aggressively EU regulators would enforce the new competition law. In Brussels, tech companies participated in workshops on how the rules will be implemented. At the same time, many app developers, competitors and consumer groups have complained to regulators that the changes the companies have made so far have been insufficient.

“Today’s opening of investigations against Meta, Google and Apple is a sure sign that the commission is serious about enforcing the Digital Markets Act,” said Monique Goyens, director general of the European Consumer Organization, a Brussels-based group critical of technology industry.

On Monday, regulators also said they were gathering information about Amazon’s compliance with the Digital Marketplaces Act. Regulators said the company could be favoring its own brand products on its online store, in violation of the law.

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