The European Union has fined Apple and Meta €700m for allegedly forcing developers to use their App Stores and collecting user data without consent, marking the first fines under the EU’s new Digital Markets Act.
The European Union has ordered two of the world’s largest tech companies, Apple and Meta, to pay a combined €700m in fines over their handling of app stores and data collection practices. The fines are the first issued by the EU under its new Digital Markets Act (DMA), which aims to promote fairness in the tech sector.
App Store Fine
Apple has been fined €500m (£428m) for allegedly forcing developers to use its App Store, which charges fees for using its platform. The European Commission argues that Apple‘s App Store is a monopoly that restricts competition and gives the company too much power over app developers.
The tech giant Apple has faced increasing antitrust scrutiny in recent years.
In 2020, the US Department of Justice (DOJ) launched an investigation into Apple's App Store policies, alleging that they stifled competition and innovation.
The European Union (EU) also initiated a probe into Apple's market dominance, focusing on its control over the iOS ecosystem.
According to a report by Statista, 71% of mobile app developers feel that Apple's App Store policies are unfair.
The growing concern is whether Apple's business practices limit consumer choice and hinder innovation in the tech industry.
Apple has responded by saying it was ‘unfairly targeted‘ and forced to give away its technology for free. The company also accused the EU of moving the goalposts during their meetings.
Data Collection Fine
Meta, which owns Facebook and Instagram, has been fined €200m (£171m) for not giving users enough choice over how their data is used. The company introduced a ‘consent or pay’ model, which meant users had to choose between allowing Meta to combine data it had collected on its platforms or paying a monthly subscription.
The European Commission argues that this model does not allow users to freely consent to how their data is used. Meta has responded by saying the ruling means Chinese and European companies are allowed to operate to different standards compared to American businesses.
Reaction from Tech Companies
Both Apple and Meta have expressed anger over the fines, with Meta accusing the EU of attempting to handicap successful American businesses. Epic Games, a company that had a long-running dispute with Apple over app distribution, has welcomed the ruling as ‘great news for app developers worldwide‘. However, a US-based think tank has come out against the decision, saying it will be ‘not well received by the Trump administration‘.
In January 2023, Meta announced its plans to acquire a 'global' company that had been in talks with Apple.
However, the deal fell through due to regulatory issues.
The failed acquisition attempt sparked concerns about the growing influence of tech giants on the global economy.
According to reports, the deal was valued at over $500 million.
The news sent shockwaves throughout the tech industry, with many analysts speculating about the potential implications for future mergers and acquisitions.
Context and Implications
The fines are relatively small compared to the huge revenues of Apple and Meta. However, they are significant in the context of the current global economic situation. The EU’s Digital Markets Act aims to promote fairness in the tech sector, but its impact is likely to be felt across the globe.
The disagreement between the EU and US over regulation of big tech companies has sparked tensions between the two nations. The US has levied a 10% tariff on imports from the EU, which Trump has accused of ‘taking advantage‘ of America.
The EU-US tech regulation dispute has been escalating in recent years, with the European Union and the United States having differing views on data protection, privacy, and digital trade.
The EU's General Data Protection Regulation (GDPR) has set a high standard for data protection, while the US has taken a more relaxed approach.
The disagreement has led to trade tensions and concerns about the impact on global tech companies operating in both regions.
