Tech giants under the cosh as Brussels enforces DMA

The European Commission has unleashed a barrage of investigations against US tech giants under its new Digital Markets Act, with one Brussels chief insisting they will face heavy fines if they are found to be in breach of the regulations.

First into the dock is Meta, which is facing an investigation into whether the recently introduced “pay or consent” model for users in the EU complies with Article 5(2) of the DMA, which requires gatekeepers to obtain consent from users when they intend to combine or cross-use their personal data across different core platform services.

Concerns over ad-free subscription services were first aired back in November, when Max Schrems-backed privacy group NOYB filed a complaint with the Austrian data protection authority over Meta’s scheme for Facebook and Instagram.

At the time, Schrems said: “Fundamental rights are usually available to everyone. There were times when [they] were reserved for the rich. It seems Meta wants to take us back more than 100 years. It’s neither smart nor legal – it’s just pitiful how Meta continues to ignore EU law.”

The Commission says it is concerned that the binary choice imposed by Meta’s “pay or consent” model may not provide a real alternative in case users do not consent, thereby not achieving the objective of preventing the accumulation of personal data by tech giants.

Next up is Google’s parent company Alphabet, which is being probed over whether its display of Google search results may lead to Google’s vertical search services – Google Shopping; Google Flights; Google Hotels – being displayed higher up the rankings than similar rival services.

The Commission maintains it is concerned that Alphabet’s measures implemented to comply with the DMA may not ensure that third-party services featuring on Google’s search results page are treated in a fair and non-discriminatory manner in comparison with Alphabet’s own services, as required by Article 6(5) of the DMA.

Finally, the Commission has opened proceedings against Apple regarding its measures to comply with obligations to enable end users to easily uninstall any software applications on iOS; easily change default settings on iOS; and prompt users with choice screens which must effectively and easily allow them to select an alternative default service, such as a browser or search engine on their iPhones.

The Commission is concerned that Apple’s measures, including the design of the web browser choice screen, may be preventing users from truly exercising their choice of services within the Apple ecosystem, in contravention of Article 6(3) of the DMA.

The Commission is also taking other investigatory steps to gather facts and information to clarify whether Amazon may be pushing its own brand products on the Amazon Store in contravention of Article 6(5) of the DMA, and Apple’s new fee structure and other terms and conditions for alternative app stores and distribution of apps from the web (sideloading) may be defeating the purpose of its obligations under Article 6(4) of the DMA.

The Commission has also adopted five retention orders addressed to Alphabet, Amazon, Apple, Meta, and Microsoft, asking them to retain documents which might be used to assess their compliance with the DMA obligations, so as to preserve available evidence and ensure effective enforcement.

Finally, the Commission has granted Meta an extension of 6 months to comply with the interoperability obligation (Article 7 DMA) for Facebook Messenger. The decision is based on a specific provision in Article 7(3)DMA and follows a reasoned request submitted by Meta. Facebook Messenger remains subject to all other DMA obligations.

In case of an infringement, the Commission can impose fines up to 10% of the company’s total worldwide turnover. Such fines can go up to 20% in case of repeated infringement.

Moreover, in the case of systematic infringements, the Commission may also adopt additional measures, including the forced sale of a business or parts of it, or banning firms from acquisitions of additional services related to the systemic non-compliance.

Internal market commissioner Thierry Breton said: “We have been in discussions with gatekeepers for months to help them adapt, and we can already see changes happening on the market. But we are not convinced that the solutions by Alphabet, Apple and Meta respect their obligations for a fairer and more open digital space for European citizens and businesses.

“Should our investigation conclude that there is lack of full compliance with the DMA, gatekeepers could face heavy fines.”

TOPICS:data protection data-driven marketing Digital Markets Act EU European Commission online advertising