The Commission has launched an investigation to understand whether the measures implemented by big tech actually respect the European DMA. Fines up to 10% of turnover
The European Commission has announced the launch of investigations into Alphabet (Google), Apple, Meta (Facebook) and Amazon, because it appears that they have not yet complied with the provisions of the Digital Markets Act (DMA). The EC expressed concern over the alleged failure to comply with the DMA's obligations regarding control over app stores and self-preferencing practices. In particular, Google is under magnifying glass for its control over Google Play and auto-preferential search on Google Search, while Apple is under fire for restrictions onApp Store and the choice screen for Safari.
Investigations into Meta and Amazon: prospects and possible consequences
The investigations also concern Meta, with a focus on its “pay or okay” model for user consent in the EU and on Amazon for possible discriminatory practices on its marketplace. The term “Pay or Okay” refers to a business model that offers users a choice between two options:
- Pay: Users can subscribe to online services or content upon monthly payment.
- Okay: As an alternative, users can continue to use the services for free, but in exchange they agree to receive personalized advertising.
This model was introduced by Meta (the company behind Facebook and Instagram) to manage the collection of user data and the display of personalized advertisements. Essentially, users must decide whether they prefer to pay to avoid advertising or accept advertising in exchange for free use of the services.
Extensions of six months or fines of up to 10% of the entire turnover
The EC issued document preservation orders to ensure the collection of evidence and granted Meta an extension of six months to comply with the interoperability obligation for Facebook Messenger. If the investigations confirm the violations, the EC could impose much end to 10% of the entire turnover of the company involved, with the possibility of increasing up to 20% in the event of repeated violations. More drastic corrective measures could also be taken, such as selling assets or prohibiting the acquisition of additional services. The EC undertakes to conclude investigations within 12 months and take the necessary measures to ensure compliance with European regulations on digital practices.
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