European Union regulators on Monday told Alphabet, Apple and Meta that they were under investigation for a series of possible violations of the region's new competition law.
The investigations are the first regulators have announced since the Digital Markets Act came into force on March 7, and signal the bloc's intention to strictly enforce broad competition rules. The law requires Alphabet, Apple, Meta and other tech giants to open their platforms so smaller rivals can have more access to their users, which could affect app stores, messaging services, Internet searches, social networks and online shopping.
The investigations in Brussels add to the regulatory scrutiny faced by the largest tech companies and show growing alignment between the United States and Europe on 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 aimed at keeping customers dependent on their iPhones and less likely to switch to a competing device. Amazon, Google and Meta also face federal antitrust lawsuits.
EU investigators said they wanted to study whether Apple and Alphabet, Google's parent company, were unfairly favoring their own app stores to exclude rivals, particularly restrictions that limit 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 over a new ad-free subscription service and the use of data to sell advertising.
The European Commission, the executive arm of the European Union, can fine companies up to 10 percent of their global revenue, which each amounts to hundreds of billions of dollars a year. The commission has 12 months to complete its investigations.
The companies had already announced a series 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.
“Certain compliance measures do not achieve their objectives and do not meet expectations,” said Margrethe Vestager, executive vice president of the European Commission, who announced the investigations at a news conference in Brussels. Law enforcement, she said, “is something we take very seriously.”
The investigations announced Monday intensify a years-long campaign by European regulators to loosen the grip of the biggest technology companies over the digital economy. This month, Ms. Vestager Announced a fine of 1.85 billion euros ($2 billion) against Apple for unfair commercial practices related to the App Store. Amazon, Google and Meta have also been the subject of EU investigations.
In an interview last month, Vestager said the United States and the European Union were now more closely aligned on the need to regulate the technology sector than they were a few years ago, when she was accused of unfairly targeting American companies. She said European regulators contacted her counterparts in Washington to “share notes.”
“I don't think cooperation has been better in a long time,” he said.
The Digital Markets Act, first passed in 2022, was intended to give European regulators more authority to force tech giants to change their business practices without the lengthy process of filing traditional antitrust lawsuits, 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 their rivals.
As part of the investigations, Alphabet, Apple and Meta will now be required to disclose more information to regulators about their business practices. The companies said they had 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 iPhones and iPads for the first time. Google also made changes to its products, including how it displays search results for flights, hotels, and shopping services.
Meta created a new subscription service that allows EU users to pay 13 euros per month if they want to use Facebook and Instagram without advertising. Regulators said the policy essentially forces users to pay a fee or agree to have their personal data used to target advertising.
“The commission is concerned that the binary choice imposed by Meta's 'pay or consent' model does not provide a real alternative in the event that users do not consent,” the commission said in a statement.
A Meta spokesperson said it would “continue to engage constructively with the commission.” Apple said it had “demonstrated flexibility and responsiveness to the European Commission and developers, listening to and incorporating their feedback.” Oliver Bethell, Google's chief competition officer, said the company “will continue to defend our approach in the coming months.”
Many in the tech industry have wondered how aggressively EU regulators would enforce the new competition law. In Brussels, technology companies have been participating in workshops on how the rules would 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 were insufficient.
“Today's opening of investigations into 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 group in Brussels. who has criticized the technology industry.
On Monday, regulators also said they were gathering information about Amazon's compliance with the Digital Markets Act. Regulators said the company may be favoring its own brand-name products in its online store, in violation of the law.
