Sunday, April 14, 2024

EU opens non-compliance investigations against Apple, Alphabet, and Meta (but not Microsoft)

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Three European flags

The European Commission announced today that it has opened non-compliance investigations against Apple, Alphabet, and Meta. The three companies make up one half of six gatekeeper companies under the Digital Markets Act (DMA).

So-called gatekeepers have a strong position in a market, which may give them an unfair advantage over competing platforms and services. Platforms such as Windows, Google Android, and iOS are gatekeepers, but so are YouTube, Google Search, Google Ads, Chrome, or Safari. The full list of gatekeepers is available here.

Designated gatekeepers had six months to comply with the EU’s list of “do’s and don’ts”. The EU Commission is launching an investigation on three of the gatekeeper companies. It suspects “that the measures put in place by these gatekeepers fall short of effective compliance of their obligations under the DMA” according to the press release.

The following investigations were opened today:

  • Alphabet and Apple steering rules in Google Play and the App Store.
  • Alphabet self-preferencing on Google Search.
  • Apple’s browse choice screen for Safari.
  • Meta’s “pay or consent model”.

The EU furthermore launched “investigatory steps” on “Apple’s new fee structure for alternative app stores” and Amazon’s “ranking practices on its marketplace”.

The investigations will last up to twelve months. Companies could face fines of up to 10% of their worldwide turnover if they are found not to comply with the DMA.

Steering rules in Android and iOS App Stores

The Commission is investigating so-called steering rules. Under the DMA, developers are allowed to “‘steer’ consumers to offers outside the gatekeepers’ app stores, free of charge”.

Alphabet’s and Apple’s implemented measures “may not be fully compliant” because of implemented restrictions and limitations.

Apple announced changes to its products in the European Union in January 2024 to comply with the DMA. Critics argued that Apple’s changes may even be counter-productive and that they “most probably impede entry by rival stores as well as stifle innovation”.

Alphabet’s measures to self-preferencing

The Commission is concerned that Alphabet may be giving its own vertical search services preferential treatment over services by competitors. These services, e.g., Google Shopping, Google Flights, or Google Hotels, show up prominently on matching searches.

Apple’s user choice obligations

Apple is facing another investigation. This one looks into the company’s obligations to “enable end users to easily uninstall any software applications on iOS”, “change default settings on iOS”, and display choice screens to users to make it easy to select default services, including browsers or search engines.

One of the concerns that the Commission has is that the design of the implementation “may prevent users from truly exercising their choice of services”.

Meta’s “pay or consent model”

The Commission opened an investigation into Meta’s new pay model that promises an ad-free and tracking-free experience on company platforms. Users who do not pay need to give consent to use the platforms.

This pay or give consent model may not “provide a real alternative”.

Amazon and Apple investigations

Amazon and Apple face another investigation each. Amazon may give its own products preferential treatment on its Amazon Store, which would be a violation of Article 6(5) of the DMA.

Apple’s new fee structures, terms, and conditions for alternative app stores and the distribution of apps is also under investigation, as these “may be defeating the purpose of its obligations under Article 6(4) of the DMA”.

Microsoft gets a pass

The EU Commission has not opened an investigation against Microsoft. Microsoft announced several wide-reaching changes to its Windows operating system in the European Union and European Economic Area. These include the ability to uninstall Microsoft Edge and Bing Web Search, but also new data handling practices.

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