EU Seeks to Net the Big-Tech Fish

Big Tech seems to be in big trouble – at least insofar as the European Union goes. Imagine lawyers representing Google (or is it Alphabet), Apple, Meta and a few others rubbing shoulders while responding to an investigating agency set up under the Digital Markets Act (DMA) probing possible non-compliance of the recently rebooted antitrust rule book. 

 While the cause for trouble for each of these three tech giants may be different, there’s a general wave of consensus around how the EU probes might have a cascading effect as other countries draw up their own versions of the digital acts. Take the case where India’s antitrust body clamped down on Google and forced it to restore a clutch of apps. 

 More specifically this time, the EU regulator is probing Alphabet around Google Play rules and its approach to self-preferencing in search results. It is also looking into Apple’s rules around the App Store (which the US Justice Department also recently questioned)  as well as Meta’s “pay or consent” model around serving ads. Imagine five investigations within three weeks after the compliance deadline kicked in! Big Tech in heap-big trouble indeed! 

The probe seeks to identify any rule breaches

The three companies, which were designated under the pan-EU market power and contestability regulations last year, are being probed to determine whether they were in breach of the Commission’s rulebook. In case, they are found violating, the DMA can impose penalties of up to 10% of their global annual turnover or 20% for repeat offenses. 

 The DMA recommends two months for the investigators to conclude the probe with a preliminary report mandated within six months. However, reports indicated that the officials weren’t actually sure about the timeframe of the probe and felt that there were possibilities of it being over within two months or actually taking longer than the guidelines. 

 Digital data experts have for long questioned Google’s means to circumvent self-preferencing by adding new features to search results that compete unfairly with rivals. As for Apple, these experts note that by warning users of risks via notifications, it was using “scare screens” to keep customers from stepping outside of its walled garden. As for Meta, the pay or be tracked mechanism has been roundly condemned as exploitative abuse of data and privacy. 

What does the EU say for each of the probes?

As per the Commission’s statement, it had opened proceedings to assess whether the measures implemented by Alphabet and Apple around obligations to app stores were a breach of the DMA provisions. It requires gatekeepers to allow app developers to steer consumers to external offers free of charge. 

 The statement says the commission is concerned that the two companies may not be fully compliant on the steering measures as they do impose restrictions and limitations and cited the example of limitations on developers to “freely communicate and promote offers and directly conclude contracts”.

 Referring to Google’s self-preferencing of search results, the Commission says it will probe the vertical search services such as Google Shopping, Google Flights and Google Hotels to check how they impact on rival services. “The Commission is concerned that Alphabet’s measures implemented to comply with the DMA may not ensure that third-party services featuring on Google’s search results page are treated in a fair and non-discriminatory manner in comparison with Alphabet’s own services, as required by Article 6(5) of the DMA,” it said.

 As for Apple, the Commission will look at its compliance efforts on several use choice obligations on the iOS that includes allowing users to easily uninstall apps, change default settings while prompting them with choice screens that allows them to select an alternative default service such as a browser or search engine on their iPhones. 

 Coming to Meta, the Commission seeks to investigate whether the pay and consent model for EU users complies with DMA provisions, especially as it requires gatekeepers to obtain consent from users when they intend to combine or cross-use their personal data across different core platform services. It says the current model may not provide a real alternative in case users do not consent, thus allowing gatekeepers to accumulate personal data. 

Now, here’s what Google, Apple and Meta have to say

Having seen what the Commission has to say, take a look at what the concerned tech giants have had to say via individual statements:  

Apple said, “We’re confident our plan complies with the DMA, and we’ll continue to constructively engage with the European Commission as they conduct their investigations. Teams across Apple have created a wide range of new developer capabilities, features, and tools to comply with the regulation. At the same time, we’ve introduced protections to help reduce new risks to the privacy, quality, and security of our EU users’ experience. Throughout, we’ve demonstrated flexibility and responsiveness to the European Commission and developers, listening and incorporating their feedback.” 

Google said, “To comply with the Digital Markets Act, we have made significant changes to the way our services operate in Europe. We have engaged with the European Commission, stakeholders and third parties in dozens of events over the past year to receive and respond to feedback, and to balance conflicting needs within the ecosystem. We will continue to defend our approach in the coming months. 

Meta’s statement reads: “Subscriptions as an alternative to advertising are a well-established business model across many industries, and we designed Subscription for No Ads to address several overlapping regulatory obligations, including the DMA. We will continue to engage constructively with the Commission.”