Apple and Meta are likely to be hit with official charges from the European Union (EU) under its new tech competition regulations.
According to insiders, EU regulators are presenting charges on the companies’ failure to comply with landmark EU regulation known as the Digital Markets Act (DMA), which establishes open competition criteria for online “gatekeepers.” Similar to anti-trust laws in the U.S., the regulations demanded Apple and Meta reign in their marketplace dominance by the summer.
The regulations, for example, force open doors for Apple users to access third-party “alternative marketplaces” for applications — AltStore, SetApp by MacPaw, and Fortnite maker Epic Games have already communicated plans to launch as independent marketplaces.
If Apple and Meta fail to offer a remedy before an official decision is issued, they could be hit with a fine of 10 percent of the company’s global annual turnover, and Apple is taking the first place spot in the race toward DMA charges.
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Despite its commitment to abide by the regulations by allowing for web-based app distribution, Apple simultaneously introduced what they call a “Core Technology Fee.” The policy would require developers to pay a €0.50 fee for “every first annual install of their app over 1 million downloads,” Mashable’s Matt Binder reported. “This includes free apps, meaning that a developer that creates a very popular free app can owe Apple money for those downloads — a cost of business that never before existed in Apple’s official App Store.”
The DMA went into effect in March, followed immediately by an announcement that the EU was opening non-compliance investigations into Apple, Meta, and Google parent company Alphabet. Google and Apple were under the microscope for their app-based self-preferencing and steering policies, which force apps to charge user subscriptions through the App Store itself. In Apple’s example, the company then pockets 15 to 30 percent of app revenue from developers selling in the App Store.
Meta may also be hit with a charge for its new “pay or consent model,” which preferences ad-free subscription models as alternatives to data collection on Facebook and Instagram, Reuters reports. The company was accused of potentially violating data privacy regulations under the DMA by way of this model, cited as not providing a “real alternative” for users who do not consent to personal data accumulation.
Meta argues that it does comply “by providing an option for EU users to subscribe to its paid subscription service on Facebook and Instagram, which provides the user with an entirely ad free experience. By not subscribing to this service, Meta argues that a user is consenting to their data being used,” reported Binder.
Following the investigation’s launch, Apple and Meta have become priority cases, insiders say.