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EU Opens Investigations Into Apple, Meta, and Alphabet Under New Tech Law

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Key Takeaways

  • The European Union has opened investigations into whether practices of Apple, Google parent Alphabet, and Meta violate its new tech law, the Digital Markets Act.
  • The companies all announced they were making changes to comply with the law, but the EU said they may still be limiting consumers.
  • The investigations focus on whether Google prioritizes its own results in shopping and flight searches, as well as whether Apple’s and Google’s app store changes comply with the law.
  • Users’ ability to easily change their default search engine on iPhones is also being investigated, as is how Meta handles user data.

The European Union (EU) is investigating a number of tech giants over concerns about whether changes they made to comply with the Digital Markets Act (DMA) were enough to meet the new law’s requirements and whether their policies could still harm EU consumers.

Apple (AAPL), Meta Platforms (META), and Google parent company Alphabet (GOOGL) are being investigated for several issues related to consumer choice and data, the European Commission, the EU’s executive body, said Monday. The tech companies all said they would make changes to be in compliance with the DMA by a deadline earlier this month, but the Commission suggested they may not have gone far enough.

Apple and Google are being investigated over whether the changes they made to allow developers to steer consumers to non-App Store and Google Play options for downloading content comply with the DMA. Apple is also being investigated over whether users can easily change default settings like which search engine to use, as the iPhone maker has a deal with Google that makes it the default search engine on Apple devices.

Google is being investigated for potentially prioritizing its own services like Google Shopping and Google Flights in searches, and Meta’s handling of consumer data and advertising across its platforms is under scrutiny as well.

Meta announced changes to a number of its products to comply with the law, including the ability for EU users to not see advertisements, or have their data used for ads with a subscription service, and to choose whether to connect accounts across platforms like Instagram and Facebook. The Commission said the “binary choice imposed by Meta’s ‘pay or consent model’ may not provide a real alternative” for some users, meaning the program could violate the DMA.

“Subscriptions as an alternative to advertising are a well-established business model across many industries, and we designed Subscription for No Ads to address several overlapping regulatory obligations, including the DMA,” a Meta spokesperson told Investopedia. “We will continue to engage constructively with the Commission.”

The Commission said Monday that it will look to finish the investigation within a year, and the companies could face significant fines if they are found to be in violation of the DMA. Apple was already fined nearly $2 billion by the EU earlier this month over its App Store rules for music services, which the company said it will appeal.

The Commission also said it is taking “other investigatory steps,” but not yet opening full investigations, to determine whether Apple’s fee structure for alternative app stores violates the DMA, as well as whether Amazon (AMZN) violates the law by prioritizing its own Amazon-branded products in search results.

Meta, Apple, Alphabet, Amazon, Microsoft (MSFT), and TikTok parent ByteDance were identified as “gatekeepers” that would be regulated by the law last year, and were given six months to change aspects of their business that didn’t comply with the law.

“To comply with the Digital Markets Act, we have made significant changes to the way our services operate in Europe. We have engaged with the European Commission, stakeholders and third parties in dozens of events over the past year to receive and respond to feedback, and to balance conflicting needs within the ecosystem. We will continue to defend our approach in the coming months,” said Oliver Bethell, Google’s director of competition for Europe, the Middle East, and Africa, in a statement.

Apple did not immediately respond to a request for comment.

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