EU targets Alphabet, Apple and Meta in wide-ranging investigations

Alphabet, Apple and Meta were all under investigation by EU regulators on Monday for possible violations of the region's new competition law.

The probes are the first announced by regulators since the Digital Markets Act came into effect on March 7, and signal the group's intention to tighten enforcement of massive competition rules. The law requires Alphabet, Apple, Meta and other tech giants to open up their platforms so smaller competitors can gain more access to their users, affecting app stores, messaging services, web search, social media and online shopping.

The investigations in Brussels add to the regulatory scrutiny the biggest tech companies face globally. Last week in Washington, the Justice Department sued Apple, alleging it violated antitrust laws with practices intended to keep customers from sticking to their iPhones and reducing switching to a competing device. Google and Amazon face federal antitrust lawsuits

The EU's investigations center on whether Google's parent company Apple and Alphabet unfairly favor their own app stores to drive out competitors, particularly restrictions that restrict how app developers communicate with customers about sales and other offers. Google is also being investigated over how it displays search results in Europe, while Meta will be questioned about its new ad-free subscription service and its use of data to sell ads.

The European Commission, the European Union's executive arm, can impose fines of up to 10 percent of companies' global revenue, which can amount to hundreds of billions of dollars each year. The commission has 12 months to complete the investigation.

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Companies had already announced several changes to their products, services and business practices to try to comply with the Digital Markets Act. But in announcing the probes on Monday, regulators said their changes did not go far enough.

“Some compliance measures fail to achieve their objectives and fall short of expectations,” said Margrethe Vestager, executive vice-president of the European Commission, who announced the investigations at a news conference in Brussels. Compliance with the law, he said, is “something we take very seriously.”

The investigations intensify a years-long campaign by European regulators to loosen the grip of the biggest tech companies on the digital economy. This month, Mrs. Vestager declared 1.85 billion euro ($2 billion) fine against Apple for unfair business practices related to the App Store. Google and Meta are also subject to EU investigations.

The Digital Markets Act, first passed in 2022, is intended to give European regulators more power to force tech companies to change their business practices without the process of filing traditional antitrust lawsuits, which can take years to resolve. A key aspect of the law is that companies cannot favor their own services over similar products offered by competitors.

As part of the investigation, Alphabet, Apple and Meta must now disclose more information to regulators about their business practices. Companies have said they have made changes to comply with the new rules.

Among the changes, Apple announced in January that developers would have new ways to reach customers in the European Union, including allowing external app stores on iPhones and iPads for the first time. Google has also made changes to its products, including the way it displays search results for flights, hotels and shopping services.

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Meta created a new subscription service that allows EU users to pay €13 per month if they want to use Facebook and Instagram without ads. The policy requires users to pay a fee or agree to have their personal data used for ad targeting, regulators said.

“The Commission is concerned that the binary choice imposed by Meta's 'pay or consent' model does not provide a real alternative if users do not consent,” the Commission said in a statement.

A spokesman for Meta said it would “continue to engage constructively with the Commission”. Apple said it “showed flexibility and responsiveness to the European Commission and developers, listening and integrating their views.” Oliver Bethel, Google's director of competition, said the company would “continue to defend our approach in the coming months.”

Many in the tech industry wonder how aggressively EU regulators will enforce the new competition law. In Brussels, tech companies are taking part in workshops on how the rules will be implemented. At the same time, many app developers, competitors and consumer groups have complained to regulators that the changes the companies have made so far have been inadequate.

“Today's launch of investigations into Meta, Google and Apple is a firm sign that the Commission is serious about enforcing digital markets law,” said Monique Goens, Director General of the European Consumer Organization in Brussels. Technology industry.

On Monday, regulators said they were gathering information about Amazon Digital Marketplaces' compliance with the law. Regulators said the company may be promoting its own branded products in its online store, in violation of the law.

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