What to know

  • The European Union fined Apple €500 million and Meta €200 million for breaching the Digital Markets Act.
  • Apple was penalized for restricting app developers from directing users to cheaper options outside its App Store.
  • Meta was fined for its 'pay or consent' model, which required users to pay for ad-free access to Facebook and Instagram.
  • Both companies must comply with the EU's decisions within 60 days or face further penalties.

The European Commission has imposed significant fines on Apple and Meta, marking the first enforcement actions under the Digital Markets Act (DMA). Apple received a €500 million penalty for preventing app developers from informing users about more affordable alternatives outside its App Store. This restriction limited consumer choice and hindered competition among digital services.

Meta, the parent company of Facebook and Instagram, was fined €200 million for its 'pay or consent' advertising model. Under this approach, users in the European Union were required to either accept targeted advertising or pay a fee to use the platforms without ads. The commission found that this practice did not provide users with genuine freedom over how their data is used online.

The DMA, which came into effect in 2024, aims to ensure fair competition in digital markets and prevent large technology companies from abusing their dominant positions. The regulation sets out clear rules for so-called 'gatekeepers'—major tech firms that control access to digital platforms—requiring them to offer more transparency and choice to both consumers and businesses.

Both Apple and Meta have been given 60 days to comply with the commission's decisions. If they fail to do so, they risk additional periodic penalty payments. These fines are notable for being the first issued under the DMA, signaling a new era of regulatory oversight for the technology sector in Europe.

Officials delayed the announcement of the penalties, which were expected in March, possibly due to ongoing tensions between the EU and the United States over digital regulation. The European Commission emphasized that the DMA is designed to give citizens more control over their data and to allow businesses to communicate freely with their customers.

Via: TheVerge