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London
CNN
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The European Union has launched an investigation into Meta, the parent company of Apple, Google and Facebook, for allegedly failing to comply with Europe’s landmark new law aimed at boosting competition in digital services.
The European Commission said it “suspects” that various practices at all three companies “lack effective compliance” with the Digital Markets Act (DMA), which came into force earlier this month. Thierry Breton of the European Commission said that if the investigation found a “total lack of compliance”, “heavy fines” could be imposed.
DMA requires a dominant online platform to provide users with more choice and rivals with more competitive opportunities. In addition to the three major tech companies currently under investigation, Amazon (AMZN), Microsoft (MSFT), and TikTok’s Chinese parent company ByteDance are also subject to the law.
The EU said Elon Musk’s X and Booking.com could also be included on the list by mid-May.
Violating the new law can result in severe penalties, including fines of up to 10% of a company’s global revenue, and up to 20% for repeat offenses. For most regulated companies, this equates to tens of billions of dollars.
The practices being investigated by the European Commission include what is called Meta’s “pay or consent” approach. Last October, META launched a subscription service called “Ad-Free Subscription,” with European Facebook and Instagram users paying up to 12.99 euros (about $14) per month for an ad-free version. Now I can do it.
“The European Commission argues that the binary choice imposed by Meta’s ‘pay or consent’ model may not offer users a real choice if they do not consent, and that it could lead to We are concerned that we may not be able to achieve our goal of preventing the accumulation of data,” the body said in a statement.
A Meta spokesperson said: “Subscriptions as an alternative to advertising is an established business model in many industries, and to address some overlapping regulatory obligations, including the DMA, ‘ad-free subscriptions’ “I designed it,” he replied. We will continue to engage constructively with the Committee. ”
The EU is also considering app stores run by Apple (AAPL) and Google. The DMA says large digital platforms, so-called gatekeepers, must allow app developers to “direct” consumers to offers outside of her two major stores for free.
Among other concerns, the EU suspects that Apple and Google’s parent company Alphabet (GOOGL) is restricting developers’ ability to “freely communicate[with end users].” Facilitate offers and directly conclude contracts, including by charging various fees,” the commission said.
“We are concerned that Alphabet, Apple and Meta are not meeting their obligations. For example, Apple and Alphabet still charge recurring fees to app developers,” said European Commissioner Margrethe Vestager. I wrote it on Monday.
According to the European Commission, Apple’s Safari “selection screen” is also under scrutiny. Under the DMA, Apple said it must show users “a selection screen that allows them to effectively and easily select an alternative default service, such as the iPhone’s browser or search engine.”
Another of the committee’s concerns concerns Google search. Alphabet has taken sufficient steps to ensure that third-party services that appear in search results are treated in a “fair and non-discriminatory manner” compared to Alphabet’s own services, such as Google Shopping and Google Flights. may not have been taken.
Oliver Bethel, Google’s head of competition, told CNN in a statement:
“Over the past year, we have participated in dozens of events with the European Commission, stakeholders and third parties to receive and respond to feedback and balance competing needs within the ecosystem. We will continue to adhere to our approach in the coming months.”
Apple did not immediately respond to CNN’s request for comment.
This story has been updated with additional information.
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