The European Commission is launching several investigations into Meta, Apple and Google to see if they are complying with the DMA. The latest measures put in place by these digital giants to comply leave us doubtful for the moment…
You won’t have to wait long! Only two weeks after the entry into force of the Digital Market Act (DMA), several large access controllers are already being singled out by the European Commission. As a reminder, the DMA aims to better regulate digital companies, in particular GAFAM, and their activities in the European Union, in order to prevent abuses due to their dominant position. It must make it possible to fight against anti-competitive practices, to prevent these companies from favoring their own services to the detriment of those of other market players, to encourage innovation and to better protect users and consumers. The new legislation has also led to a whole host of changes in the services of large digital companies (see our article). The fact remains that the European Commission seems determined to be respected! This one decided to launch a series of five surveys on Meta (Facebook, Instagram, WhatsApp), Apple and Alphabet (Google) for non-compliance with DMA rules.
“For months we have been talking with large gatekeepers to help them adapt, and we can already see changes in the market. But we are not convinced that the solutions proposed by Alphabet, Apple and Meta meet their obligations in favor of a fairer and more open digital space for citizens and businesses of the European Union”explains Thierry Breton, Internal Market Commissioner. “If our investigation finds a lack of full compliance with the DMA, large gatekeepers could face heavy fines.”
Non-compliance with the DMA: fines that risk being steep
First of all, Google is suspected of having exploited the monopoly of its search engine to favor its own services (such as Google Shopping, Flights and Hotels). A problem which had already earned it a fine of 2.4 billion euros in 2017, but the proposed solutions were never considered conclusive. With the entry into force of the DMA, Google has strived to leave more room for competition, by offering more links to comparison sites and adding shortcuts so that we can refine our search instead of its comparison tool integrated into the results (see our article). It remains to be seen whether this will be enough.
Alphabet is also, with Apple this time, targeted for restrictions in its application store. Apple was also fined 1.8 billion euros at the beginning of March for abuse of a dominant position, by promoting its own online music service, Apple Music, at the expense of the competition. In addition, their so-called “anti steering” measures, or unfair commercial conditions, could prevent developers from communicating freely with their users about more interesting offers online – therefore outside the application and the integrated payment system of the two companies, which are suspected of continuing to impose restrictions and limitations on developers.
But Brussels is not done with Apple and intends to investigate the possibility of easily uninstalling applications, modifying the default apps and services in iOS, and selecting another browser and another search engine by default. “The Commission is concerned that Apple’s measures, including the design of the web browser choice screen, could prevent users from truly exercising their choice of services within the Apple ecosystem”, explains the European Commission. There is also the question of the pricing structure and conditions that the company has put in place for alternative stores. Indeed, with DMA, Apple now allows users to install applications outside the App Store, without having to pay the commission. But the firm took care to put in place some protections so as not to lose its monopoly. Thus, for developers who choose to distribute their app either solely outside the App Store, or in combination with it, an additional tax, called Core Technology Fee (CTF), will be imposed on them. Thus, if the application exceeds one million installations, each additional download (including updates) will be billed €0.5 to the publisher. Suffice it to say that the system is not very advantageous for services that already have a high number of users…
Finally, the European Commission has opened an investigation into Meta and its much-maligned paid subscription. As a reminder, the company now offers users a paid subscription to free themselves from advertising and data collection (see our article). They can choose to pay €9.99/month to not be “tracked” on the web version of Meta’s social networks, or €12.99/month on the Android and iOS mobile applications. This unique subscription links Facebook, Instagram or any other identifier registered in the “Accounts” area of Meta. Suffice to say that at this price, the majority of users must undoubtedly prefer to stay on the free version of these platforms… The uFC-Que Choisir and other associations have also filed a complaint with the CNIL about this. subject.
The European executive hopes to conclude these procedures within a maximum period of twelve months. The new regulation provides for fines of up to 10% of the global annual turnover of the group concerned and up to 20% in the event of a repeat offense! The European Commission may also impose penalties of up to 5% of its total daily global turnover. This represents tens of billions of euros for GAFAM! If the firm commits at least three violations over eight years, the Commission may open a market investigation and, if necessary, “impose behavioral or structural corrective measures”. Thus, it may prohibit it from buying other companies over a given period or force it to sell an activity (sale of units, assets, intellectual property rights or brands). This time, for sure, we’re not laughing anymore!