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Apple and Google to Undergo EU Investigations Under New Digital Markets Act

Apple and Google to Undergo EU Investigations Under New Digital Markets Act

Mar 21, 2024

Apple and Google to Undergo EU Investigations Under New Digital Markets Act

Tech giants Apple Inc. and Google, owned by Alphabet Inc., are on the brink of facing comprehensive European Union investigations into whether their practices comply with the newly enacted Digital Markets Act (DMA), which aims to curtail the powers of major technology companies. According to sources familiar with the situation, the European Commission is preparing to launch these probes imminently.

The focus of the investigations will be on the new fees, terms, and conditions that Apple and Google have imposed on app developers for their respective app stores. These sources, who requested anonymity due to the private nature of the information, suggest that the EU is keen to determine if these practices align with the regulations set forth by the DMA.

Additionally, Meta Platforms Inc.'s recent proposal to introduce a monthly fee for users of Facebook and Instagram is expected to attract future attention from the EU under the same legislative powers.

This increased scrutiny comes at a time when Apple is already contending with legal challenges in the United States. The U.S. Justice Department, supported by 16 attorneys general, has initiated a lawsuit against Apple, alleging antitrust violations linked to the company's restrictive measures on competitors in relation to the features of its devices.

The DMA, which clearly outlines permissible and prohibited actions for the world's largest tech platforms, authorizes the EU to impose substantial fines that could reach up to 10% of a company's total annual global revenue, and this could escalate to 20% for repeat offenders. Once formal investigations commence, EU regulators aim to reach final decisions within 12 months.

At this time, the European Commission in Brussels has declined to provide a comment. Requests for comments from Apple, Google, and Meta have not received immediate responses.

The enforcement of the DMA, which officially began on March 7, has already resulted in Apple being fined €1.8 billion ($2 billion) for restricting music streaming apps from informing users about less expensive alternatives. In the aftermath, Spotify, the company whose complaint sparked the initial EU action against the App Store, criticized Apple's proposed changes under the DMA as "unacceptable" and "nonsensical." Apple had suggested eliminating the historical 30% commission while introducing new charges for developers.

As the situation unfolds, the potential investigations by the EU could have significant implications for the operations of these tech behemoths in Europe and may set a precedent for regulatory approaches internationally. The tech industry and regulatory bodies will be closely monitoring the outcome of these anticipated inquiries.

Originally reported by Bloomberg


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