On Wednesday, the major EU technological repression began on Wednesday, while the European Commission issued the first fines under the Digital Markets Act (DMA), a regulation designed to prevent the main players in the world of technology from abusing their dominant position in industry.
Apple’s fine, the largest of the two, totaled 500 million euros ($ 570 million) and follows an investigation to find out if the company prevented customers from consulting and accessing offers that could save money – cheaper streaming subscriptions, for example – if they paid outside its ecosystem of the App Store. The Commission noted that Apple prevents applicants from applications from informing people less expensive to pay and ordered the company to change this practice.
Meta, meanwhile, received a fine of 200 million euros ($ 228 million), due to the fact that it offers people in Europe a binary choice: use Meta platforms for free (including Facebook, Instagram and Whatsapp) and will accept that the company will combine your data between services or pays a premium to guarantee an experience without advertising in which your data is kept.
Since the Commission initially declared to META that this model does not comply with the DMA, the company has introduced new practices that provide people more choice on how their data is used. But the company still received a fine for its previous model.
The Silicon Valley and the EU have long had a fractured relationship – almost ten years ago, the CEO of Apple, Tim Cook, rejected a massive tax bill as a “political shit” – but with geopolitical tensions between Europe and the United States at the moment, the fines are more division than ever. It is often difficult to see how high-level regulatory decisions affect the technological industry, but you only have to look at Apple abandoning the port of iPhone lighting in favor of the USB-C load to understand the power of the EU to influence the behavior of technological companies.
The purpose of the DMA is double. It gives new promising technological companies the opportunity to prove themselves in an industry dominated by the richest companies in the world. It is also designed to ensure that technological users across Europe (and sometimes further) have access to the best services and offers, as well as the possibility of deciding for themselves how to spend their money and how their data is used. The Commission has the power to infiltrate businesses up to 10% of their annual world income under DMA, but these fines fall below this threshold in order to be proportionate to the specific violations of the law.
“Activating the free choice of business and consumers is at the heart of the rules established in the law on digital markets,” said Henna Virkkunen, the EVP of the Commission for technological sovereignty in a declaration. “This includes the guarantee that citizens have total control over the moment and how their data is used online, and companies can communicate freely with their own customers. The decisions adopted today find that Apple and Meta have removed this free choice of their users and must modify their behavior.”
But for the Silicon Valley technology giants, the EU approach may often seem unnecessarily punitive, in some cases, obliging them to make changes that they affirm are in fact worse for users. In a statement published on Wednesday, an Apple spokesperson accused the commission of having moved the goal post and said that the company was planning to appeal the decision.
“Today’s announcements are another example of the European Commission unjustly targeting Apple in a series of decisions that are bad for the confidentiality and safety of our users, bad for products and forcing us to give our technology for free,” they said. “We spent hundreds of thousands of hours of engineering and made dozens of changes to respect this law, which our users have requested.”
Meanwhile, Meta’s World Affairs Director Joel Kaplan said the Commission “tried to handicap successful American companies while allowing Chinese and European companies to operate according to different standards”.
“It is not only a fine; the commission forces us to change our business model effectively imposes a price of several billion dollars on Meta while forcing us to offer a lower service,” he added. “And by unfairly restoring personalized advertising, the European Commission also harms European companies and economies.”
It is likely that Meta, feeling injured that it is penalized even after having made multiple modifications to its commercial model, will also appeal the fine. The company remains categorical about the fact that there is nothing in the DMA to justify the changes that the commission asks it to make.
