EU fines Apple and Meta for breaching digital markets law

The European Union (EU) has imposed fines on Apple and Meta for breaching laws under the Digital Markets Act (DMA), EU legislation designed to ensure fair competition in digital markets.

The EU has fined Apple and Meta US$567 million and US$227 million respectively. Apple was penalised for breaching its anti-steering obligation under the DMA, while Meta violated the DMA obligation to provide consumers with the choice of a service that uses less of their personal data.

The two decisions come after extensive dialogue with the companies concerned allowing them to present in detail their views and arguments, according to EU's official statement. 

Regarding the EU's non-compliance decision on Apple's steering terms, it said Apple fails to inform customers about alternative offers outside the App Store, steer them to those offers, and facilitate purchases. Instead, Apple's various restrictions lead to developers being unable to fully utilise alternative distribution channels, which limits consumers' access to cheaper offers.

Apart from the fines, the EU has ordered Apple to remove the technical and commercial restrictions on steering and to refrain from perpetuating non-compliant conduct in the future, which includes adopting conduct with an equivalent object or effect. 

On the other hand, the EU has identified Meta's “consent or pay” model as a form of non-compliance. Launched in 2023, this advertising model allows EU users of Facebook and Instagram to choose between consenting to the combination of their personal data for personalized advertising or paying a monthly subscription for an ad-free service.

The commission found that this model is not compliant with the DMA, as it did not give users the required specific choice to opt for a service that uses less of their personal data but is otherwise equivalent to the “personalised ads” service. Meta's model also did not allow users to exercise their right to freely consent to the combination of their personal data.

In November last year, after numerous exchanges with the commission, Meta introduced another version of the free personalised ads model, claiming it uses less personal data to display advertisements. The commission is assessing this new option and continues its dialogue with Meta, requesting the company to provide evidence of the impact that this new ads model has in practice, according to the release. 

Apple and Meta are required to comply with the commission's decisions within 60 days, otherwise they risk periodic penalty payments.

Teresa Ribera, executive vice-president for clean, just and competitive transition, said: "Apple and Meta have fallen short of compliance with the DMA by implementing measures that reinforce the dependence of business users and consumers on their platforms. As a result, we have taken firm but balanced enforcement action against both companies, based on clear and predictable rules. All companies operating in the EU must follow our laws and respect European values."

MARKETING-INTERACTIVE has reached out to Meta and Apple for a statement respectively. 

Don’t miss: EU accuses Meta of breaching digital marketing act with paid ad-free option

Back in March last year, the commission opened non-compliance investigations into Apple's rules on steering in the App Store and Meta's “pay or consent model”. After that, the commission respectively informed Apple and Meta of its preliminary view that the companies were in breach of the DMA.

The European Commission accused Meta Platforms of breaching the bloc’s new digital competition regulations by forcing Facebook and Instagram users to either view ads or pay to skip them.

Join us this coming 17 June for #Content360 Hong Kong, an insightful one-day event centered around responsible AI, creativity VS influencers, Xiaohongshu and more. Let's dive into the art of curating content with creativity, critical thinking and confidence!

Related articles:

Apple confirms iPhone 16 launch date in Indonesia as sales ban ends
Apple finally gets green light from Indonesia to sell iPhone 16
Meta’s MY head Nicole Tan takes on SG country director role