EU Probes Big Tech Under the DMA: Why?

The European Union has taken a decisive step towards enforcing its Digital Markets Act (DMA) by launching investigations into tech giants Alphabet, Apple, and Meta, over potential violations of the groundbreaking legislation aimed at curbing unfair advantages wielded by Big Tech.

Last year, the European Commission identified six major companies, including Alphabet, Amazon, Apple, Meta, Microsoft, and TikTok owner ByteDance, as “gatekeepers” subjected to heightened regulatory scrutiny under the DMA. These companies were given a six-month grace period, expiring on March 7, to comply with regulations aimed at fostering fair competition and consumer choice in the digital sphere, reported Reuters.

Violations of the DMA could incur substantial fines, with penalties of up to 10% of a company’s global annual turnover looming over those found in breach. The EU Commission has signaled its intent to expedite the probes, aiming for completion within a year.

Key areas of investigation include according to Reuters:

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1. Anti-Steering Practices: The investigations target Alphabet and Apple’s payment systems, particularly focusing on alleged “anti-steering” behaviors. This pertains to instances where app developers direct users to make payments outside of the platforms’ ecosystems, thus bypassing associated fees. Apple, in particular, has faced accusations of anti-steering, with recent fines levied against the company for obstructing users’ access to discounts and promotions outside its payment ecosystem. Spotify, among others, has applauded Brussels’ actions, accusing Apple of stifling competition.

2. Self-Preference: Online marketplaces are under scrutiny for allegedly favoring their own products over competitors’, thereby skewing the competitive landscape. Google, for instance, faces investigation over whether it prioritizes its own services in search results, potentially disadvantaging rivals such as Booking.com or Skyscanner. Similarly, the EU is probing Amazon’s online store to determine if it unfairly promotes its own products.

3. User Choice and Data Privacy: Apple’s compliance with DMA requirements, such as facilitating software uninstallation and allowing users to change default settings easily, is under question. Additionally, Meta’s practices regarding user consent for data collection across platforms like Facebook and Instagram are under scrutiny. Meta’s introduction of a “pay or be tracked” policy, offering ad-free versions of its apps for a fee, is seen as an attempt to navigate DMA regulations.

The investigations mark a significant step in the EU’s efforts to rein in the dominance of Big Tech and create a more level playing field in the digital marketplace. As the probes unfold, the outcomes could have far-reaching implications not only for the companies involved but also for the broader landscape of digital competition and consumer rights within the European Union.

Source: Reuters