What is the collective noun for investigations into major technology companies? Because the European Union has just announced a pile of investigations into designated gatekeepers under the Digital Markets Act (DMA). Alphabet/Google, Apple and Meta face their first formal investigations for non-compliance under the bloc's rebooted pre-competition rulebook.
Alphabet/Google's rules on Google Play guidance and its approach to self-preference in search results are in the framework. For Apple, the European Union is also considering its own rules regarding guidance in the App Store and the design of selection screens for alternatives to its Safari web browser. While Meta's “Pay or Approval” model will be examined by the committee.
The three gatekeepers, who were designated under the EU regulation last fall, face a formal investigation in these areas to determine whether they are violating the rule book, as the Commission suspects. Confirmed violations of the DMA can result in fines of up to 10% of global annual sales, or up to 20% in the case of repeat violations.
The European Union will have up to 12 months to conclude investigations. A preliminary report could be issued within six months.
The union's enforcement actions come as antitrust scrutiny continues on the three US companies also based at home.
Since the three companies revealed their DMA compliance plans, there has been a raft of criticism that the proposals do not comply with the new EU law.
For example, Google has been accused of seeking to avoid the regulation's ban on self-preference by launching new rich features in search results that unfairly compete with competitors. While Apple's use of user notifications warning them of the dangers of stepping outside its walled garden has been attacked by developers as “scare screens”. Meta's “pay or track” tactic has been condemned as exploitative by privacy and consumer rights groups. (Earlier this month, the Commission sent definitional questions about this under the DMA's sister regulation, the Digital Services Act as well.)
“The Commission has opened proceedings to assess whether the actions implemented by Alphabet and Apple in relation to their obligations relating to App Stores breach the DMA. “Article 5(4) of the DMA requires gatekeepers to allow app developers to ‘direct’ consumers to offers outside of App Stores,” the Commission wrote. “Gatekeeper apps, for free,” saying she was concerned about the couple’s mentoring measures.“They may not be fully compatible because they impose different restrictions and boundaries,” he said, citing for example restrictions on developers’ ability to “communicate freely, promote offers and conclude contracts directly.”
Regarding concerns about Google favoring itself, the EU said the investigation would focus on Google's own vertical search services (such as Google Shopping; Google Flights; Google Hotels) and the impact the action might have on similar competing services.
“The Commission is concerned that Alphabet’s procedures in place to comply with the DMA may not ensure that third-party services that appear on a Google search results page are treated in a fair and non-discriminatory manner compared to Alphabet’s own services, as required under Section 6.(5) of the DMA,” he wrote. .
For Apple, the EU will also consider whether it complies with a range of user choice obligations on iOS – including enabling end users to easily uninstall apps; Easily change default settings; It prompts users for selection screens that it says “should effectively and easily allow them to choose an alternative default service, such as the browser or search engine on their iPhone.”
“The Commission is concerned that Apple’s actions, including the design of the web browser selection screen, may prevent users from meaningfully exercising their choice of services within the Apple ecosystem, in contravention of Article 6(3) of the DMA,” it added. .
In Meta, the EU said the measures will investigate whether the “pay or consent” model recently introduced for EU users complies with Article 5(2) of the DMA, noting that this part of the regulation “requires gatekeepers to obtain consent.” Users when they intend to combine or jointly use their personal data across different platform services.
“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, and therefore does not achieve the goal of preventing the accumulation of personal data by gatekeepers,” it said.
Commenting, Margrethe Vestager, the Commission's Executive Vice-President responsible for competition policy, said: “We believe that the proposed solutions put forward by the three companies are not fully compatible with the DMA. We will now investigate the companies' compliance with the DMA, to ensure open and competitive digital markets in Europe.”
“The Digital Markets Act became effective on March 7. We have been in discussions with the gatekeepers for several months to help them adapt, and we can already see the changes happening in the market. Thierry Breton, Internal Market Commissioner, added in another supportive statement: “But we are not convinced that the solutions “Provided by Alphabet, Apple and Meta honor their commitments to providing a fairer and more open digital space for European citizens and businesses.” “If our investigation concludes that there is no full compliance with the DMA, the gatekeepers could face heavy fines.”
In response to the Commission's announcement of the non-compliance action, Apple sent us this statement:
We are confident that our plan is consistent with the DMA, and we will continue to engage constructively with the European Commission as it conducts its investigations. Teams across Apple have created a wide range of new developer capabilities, features, and tools to comply with regulations. At the same time, we have introduced protections to help reduce new risks to the privacy, quality, and security of our EU users' experience. Throughout we have demonstrated flexibility and responsiveness to the European Commission and developers, listening to and incorporating their feedback.
Google also sent a statement – attributed to Oliver Bethel, director of competition:
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 at 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.
Here is Meta's statement defending her approach:
Subscriptions as an alternative to advertising is an established business model in many industries, and we designed ad-free to address several overlapping regulatory obligations, including the DMA. We will continue to work constructively with the Committee.
The loudest critics of Apple's approach to DMA compliance are likely to be disappointed by the EU's announcement on Monday, as the bloc has yet to formally investigate Apple's new fee structure on iOS, which the iPhone maker has made conditional on developers wanting to take advantage of DMA entitlements. . Although the committee announced what its press release described as “investigative steps” in this area. So it may be a few steps away from formal action here as well.
Specifically, the Commission says it is looking into Apple's terms and conditions for alternative app stores and the distribution of apps from the web (also known as sideloading) – saying that the terms imposed by Apple “may be inconsistent with the purpose of its obligations under Article 6(4) of the DMA”. But – again, to be clear – this does not yet constitute a formal action for non-compliance.
The aforementioned section of the DMA requires gatekeepers to “permit and technically enable the installation and effective use of third-party software applications or software application stores… and permit access to such software applications or software application stores by means other than the relevant platform for the services of this gatekeeper.” “, as well as containing provisions intended to prevent gatekeepers from creating friction in the experience of third-party stores and sideloaded apps (such as preventing users from setting them as the default).
The Commission has also indicated that it expects gatekeepers to adhere to the spirit of the law – meaning it will consider the impact of the regulation as a key compliance measure.
Also today, the EU announced “investigative steps” in relation to Amazon – saying it is looking into Amazon's labeling practices on its marketplace where the Commission suspects it “may” self-favorite its own brand products in breach of the DMA. Again, this is not a formal non-compliance action.
In response, an Amazon spokesperson said: “Amazon is committed to the Digital Markets Act and has engaged constructively with the European Commission on our plans since appointing two of our services. We continue to work hard every day to meet all of our customers' high standards within Europe's changing regulatory environment.”
Elsewhere, the European Union has instructed five gatekeepers to retain documents that it says may be used to assess their compliance.
These “retention orders” are directed at Alphabet, Amazon, Apple, Meta and Microsoft – so, the EU is clearly casting a wider, and perhaps precautionary, net, since Microsoft is not on today's list for formal or investigative investigation. The committee said the orders are intended to ensure that the tech giants “preserve available evidence and ensure effective implementation.”
Only ByteDance – the designated six-door gatekeeper to its social network TikTok – avoided any DMA action today.
An interoperability extension for Facebook Messenger
Finally, there is a silver lining for Meta – the Commission has given it an additional 6 months to comply with the DMA's interoperability obligation for Facebook Messenger.
The regulation requires messaging apps that are classified as core platform services to open up to competitors to enable cross-platform messaging. This element of the DMA allows for a phased approach – with only basic text messaging requirements in the first phase. The regulation also allows – “exceptionally” – the extension of timelines in the event of a “reasonable request” and this is what the Commission says is acceptable to Meta.
“The decision is based on a specific provision in Article 7(3) DMA and follows a reasoned request submitted by Meta,” she wrote, adding: “Facebook Messenger remains subject to all other DMA obligations.”
According to the DMA, a gatekeeper's request to extend compliance time limits must make clear that it is “necessary to ensure effective interoperability and maintain the necessary level of security, including end-to-end encryption.”
