The European Commission has just dropped a bombshell in the world of digital giants. This morning, after months of investigation, the European Commission announced record fines of €500 million for Apple and €200 million for Meta (parent company of Facebook and Instagram). A decision that is already raising eyebrows in Silicon Valley and confirms, if need be, the EU's open war against the anti-competitive practices of Big Tech.
These are the first sanctions imposed under the new European regulation on digital markets. The Digital Markets Act came into force last year to put an end to abuses of dominant positions by tech giants.
What are Apple and Meta being criticized for?
The apple company is being criticized for locking down its app ecosystem, prohibiting developers from redirecting their users to alternative payment platforms. Specifically, an app developer was previously prohibited from informing its users that a Spotify or Netflix subscription could be 20% cheaper if purchased outside the App Store. This practice is regularly referred to as a "hidden Apple tax," even though the American giant still charges a 15 to 30% commission on each transaction.
At the same time, Mark Zuckerberg has suffered another defeat in Europe. The "pay or consent model" imposed by Meta since November 2023 has just been ruled illegal. European Facebook and Instagram users had to choose between accepting ad targeting through the use of their personal data, or paying a subscription of €7.99/month on mobile (€5.99 via website) to avoid ads and preserve their privacy.
An Unprecedented European Response
For the European Commission, this model is not compliant and did not allow users to choose a free alternative that would use less personal data. Since November 2024, Meta has changed its approach and this new version using less personal data is currently being evaluated by Brussels.
For now, these sanctions send a strong political signal even if they represent only a tiny fraction of these companies' turnover. The real threat looms elsewhere for these two giants, who, in the event of a repeat offense, are exposed to fines of up to 10% of their global turnover. This would represent several billion dollars for Apple and Meta.
“Today’s decisions send a strong and clear message […] All companies operating in the EU must follow our laws and respect European values,” explains Teresa Ribera, the Commission’s Executive Vice-President for a Clean, Fair and Competitive Transition.
Apple to appeal, Meta expected to follow
In a tense global context, Apple says it has been “unfairly targeted” and has already indicated that it will appeal. A representative from the Cupertino company told our colleagues at 01net: "Today's announcements are yet another example of how the European Commission is unfairly targeting Apple in a series of decisions that are bad for our users' privacy and security, bad for our products, and that force us to give away our technology for free. We've dedicated hundreds of thousands of engineering hours and made dozens of changes to comply with this law, none of which were requested by our users. Despite countless meetings, the Commission continues to change the rules of the game every step of the way. We will appeal and continue to engage with the Commission in the interest of our European customers.".
As for Meta, the social media giant is also expected to appeal and is becoming even more aggressive. "The European Commission is trying to put obstacles in the way of successful American companies while allowing Chinese and European companies to operate under different standards," explains Joel Kaplan, the group's director of international affairs, a former member of the Republican Party and ally of Donald Trump.
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