Apple and Meta fined €700 million by EU for digital market breaches

Apple Inc (NASDAQ:AAPL, ETR:APC) and Meta Platforms Inc (NASDAQ:META) have been respectively fined €500 million and €200 million for breaching the European Union's digital market rules. 

The European Commission said Apple had breached its 'anti-steering' obligation under the Digital Markets Act (DMA), and that Meta breached obligations under the act to give consumers the choice of a service that uses less of their personal data under its 'consent or pay' model.

DMA rules came into effect last year. 

What happened?

For Apple, the DMA requires app developers distributing their apps via the company's App Store to be able to inform customers, free of charge, of alternative offers outside the App Store, steer them to those offers and allow them to make purchases.

The Commission found Apple failed to comply with this obligation and has ordered the iPhone maker to remove both technical and commercial restrictions on steering and to "refrain from perpetuating the non-compliant conduct in the future".

Meta, meanwhile, was fined for giving its EU users of Facebook and Instagram a choice between consenting to personal data combination for personalised advertising or paying a monthly subscription for an ad-free service.

The EC said this was not compliant with the DMA "as it did not give users the required specific choice to opt for a service that uses less of their personal data but is otherwise equivalent to the ‘personalised ads' service", while also not allowing users to exercise their right to freely consent to the combination of their personal data.

Both decisions come after "extensive dialogue" between the EC and the two companies.

'Firm but balanced' 

Commissioner Teresa Ribera said the decisions "send a strong and clear message" about the DMA, which she said "protects European consumers and levels the playing field".

"Apple and Meta have fallen short of compliance with the DMA by implementing measures that reinforce the dependence of business users and consumers on their platforms," she added, saying the EC had taken "firm but balanced enforcement action against both companies".

Henna Virkkunen, commissioner in charge of tech sovereignty and security, said the rules laid down in the DMA include ensuring that citizens have full control over when and how their data is used online, and businesses can freely communicate with their own customers.

"The decisions adopted today find that both Apple and Meta have taken away this free choice from their users and are required to change their behaviour."

Apple user choice probe closed

The EC said it has now decided to close its investigation into Apple's user choice obligations under the DMA, following talks with the company, which included a preliminary view that Apple's contract terms concerning alternative app distribution breach the DMA.

As a result of the discussions, Apple changed its browser choice screen, which the Commission said resulted in a "streamlining" of the user experience of selecting and setting a new default browser on iPhone, while other changes made it easier for users to change default settings for calling, messaging, call filtering, keyboards, password managers, and translation services on iPhones.

In addition, users can now uninstall several Apple pre-installed apps, such as Safari, which they were previously unavailable to do.

The commission also found that Meta's Facebook Marketplace should no longer be designated under the DMA.

Meta requested in March last year to reconsider the designation of Marketplace and the EU found that fewer than 10,000 business users were using the platform and therefore it is felt not to be an important "gateway" for business users to reach end users.