European Commission Probes Tech Giants for Alleged DMA Non-compliance
Summary:
The European Commission has initiated a probe into Apple, Meta, Amazon, and Alphabet for alleged non-compliance with its Digital Markets Act (DMA). The investigation focuses on these tech giants' practices involving app store rules, payment models, and marketplace rankings, among others. In the event of violations, companies could face fines equal to 10% of their total global revenue. The investigation follows a recent US Department of Justice lawsuit accusing Apple of stifling competition and innovation through its marketplace policies and alleged monopoly.
The European Commission has initiated an investigation due to non-adherence into the actions of several tech giants including Apple, Meta, Amazon, and Alphabet, Google's parent company. This is in relation to its Digital Markets Act (DMA). The announcement on March 25 read, "the commission suspects that the defensive measures adopted by these key players fail to adequately uphold the responsibility as defined under the DMA."
The EU's competition authorities have set its focus on Alphabet's "steering" policies in its Google Play store and its self-prioritization in Google Search, Apple's "steering" rules on its App Store and choice screen for Safari, as well as Meta's "pay or consent model".
Moreover, the Commission is studying steps related to Apple's newly introduced fee system for other app stores and Amazon's ranking policies on its marketplace. It has commanded these firms to preserve certain documents for monitoring "effective implementation and compliance" in relation to their commitments.
The inquiry is set to wrap up within 12 months, where potential violations could result in fines amounting to 10% of the company's total global revenue. The Commission further elaborated that continual violations could force the "gatekeeper" companies to sell parts of their business or prohibit them from buying additional services.
The DMA was brought forth by the EU to nurture "contestable" and impartial markets in the digital sector. The law aims to monitor "gatekeepers" which are defined as "major digital platforms that act as a critical entrance point between business users and consumers, due to their dominant position enabling them to create an obstruction in the digital economy."
According to the Commission, Alphabet, Amazon, Apple, ByteDance (parent company of TikTok), Meta and Microsoft are listed as the six "gatekeepers" under the DMA. These companies were given until March 7th to fully abide by the DMA guidelines. This recent probe follows a lawsuit filed by the United States Department of Justice (DOJ) against Apple on March 21st, alleging that its app store policies and "monopoly" illegally stifled competition and innovation.
The lawsuit also accuses Apple of holding a monopoly in the smartphone market and manipulating developers into using its payment platform, this causing a lock-in situation for developers and users within its ecosystem.
Published At
3/25/2024 2:29:44 PM
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