US-based technology giants Apple and Meta Platforms are poised to face charges in Europe shortly for failing to meet the European Union’s Digital Markets Act (DMA), according to a recent Reuters report. The European Commission is expected to formally announce these charges before the summer break in August.
The European Commission initiated investigations into Apple, Meta Platforms, and Alphabet’s Google in March. The European Commission has prioritized Apple and Meta due to their substantial influence in the digital market in Europe.
The DMA aims to curtail the dominance of Big Tech, ensuring competition and facilitating easier transitions between competing online services, such as social media platforms, internet browsers, and app stores.
Financial implications for non-compliance are significant, with penalties based on company global revenue, the report said. Both Apple and Meta have substantial influence in the digital market place in Europe considering their revenue in Europe.
Apple’s European sales in the first quarter of 2024 reached $24.123 billion, while Meta Platforms reported $9.159 billion in digital advertising revenue and a total of $9.441 billion in the fourth quarter of 2023 from Europe. Meta’s social media platform, Facebook, boasts 308 million European users, with an average revenue per user of $23.14.
The EU regulators’ preliminary findings, akin to antitrust charges, will be issued sequentially, starting with Apple, followed by Meta. Meta has chosen not to comment on the matter, while Apple referred to a March statement expressing confidence in its compliance plans and its ongoing constructive engagement with the Commission.
In response to these findings, companies may propose remedies to address the outlined concerns. A final decision, potentially involving fines up to 10 percent of a company’s global annual turnover, is anticipated before EU antitrust chief Margrethe Vestager’s term ends in November.
Penalty of up to 10 percent of their global revenue will be a significant amount for both Meta and Apple. Apple’s annual sales revenue for 2023 was $383.28 billion. The annual revenue of Meta Platforms was $134 billion last year.
The investigation into Apple centers on its steering rules, which allegedly restrict app developers from informing users about external offers without charge, and the new fees imposed on app developers. A secondary probe concerning Apple’s Safari web browser’s choice screen will take longer to conclude, the report said.
Meta’s preliminary findings pertain to its recently implemented pay-or-consent model, requiring users to pay a subscription fee for an ad-free experience on Facebook and Instagram.
The European Commission in September 2023 designated Alphabet, Amazon, Apple, ByteDance, Meta and Microsoft as gatekeepers of the digital market place.
