The European Union (EU) has launched an investigation into big tech corporations just 18 days after initiating the Digital Markets Act (DMA). The companies under scrutiny are Apple, Google (Alphabet), and Meta, with the EU examining whether these corporations have violated the DMA regarding allowing external payments, search exposure, and personal data collection. The companies could face a significant blow to their business operations if any violations are found, as they may be hit with fines of up to 10% of their global sales.
| EPA-Yonhap News |
On the 25th (local time), the EU Commission announced the start of an investigation into whether Google, Apple, and Meta have violated the DMA provisions. The investigation focuses on five major areas. Firstly, they will examine whether Google and Apple, both mobile operating system (OS) developers, are still blocking external payments. The Commission pointed out that the Anti-Steering rule, which prohibits app developers from advertising other payment methods, still does not comply with DMA standards.
Apple is also suspected of making it impossible to remove the default software installed on the iPhone iOS easily. Google, the dominant search engine, is under investigation for still prioritizing its linked services when users search for shopping, travel, and other items.
Meta is being investigated concerning the collection of personal information for targeted advertising. Meta has introduced an ad-free subscription model within the EU following the implementation of the DMA. Conversely, it is argued that users who have not subscribed to this fee-based service are forced to provide personal information. Thierry Breton, EU Commissioner for the Internal Market, said, “They have forced a binary choice of either paying a fee or agreeing to the use of information.”
The investigation by the DMA will continue for 12 months. It is important to note that the DMA does not include any consultation process for the companies under investigation, such as submitting any improvement points. If the companies do not unconditionally follow the decisions made by the EU, they may face a fine amounting to 10% of their global sales. In case of repeated violations, the fine could increase to a maximum of 20%, forcing the companies to withdraw from the EU market entirely.
The big tech companies under investigation are pushing back immediately. Apple and Google have stated that they comply with the DMA requirements, while Meta has countered, saying, “Subscription is a common business structure.” The IT industry predicts that a legal battle is inevitable even if the EU ultimately rules that the big tech companies have violated the DMA.
The fact that all the companies under investigation by the EU are American has heightened resentment. The EU Commission also mentioned on the same day that it could investigate Amazon. It looks into whether Amazon favors its brand (PB) products. Apart from ByteDance (TikTok), all the companies subject to the DMA are American. There has been criticism that the EU, lagging in the IT competition, is trying to restrain the U.S. through legislation. Therefore, there are concerns that if sanctions against American companies continue, it could lead to diplomatic issues between the U.S. and the EU.
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