EU fines Apple €500m for App Store restrictions, Meta €200m for ads in first DMA penalties

Apple and Meta✴ have become the first companies to be fined for violating the European Union’s (EU) Digital Markets Act (DMA). Apple has been ordered to pay €500 million for restrictions on the App Store, while Meta✴ has been ordered to pay €200 million for its unlawful advertising model on Facebook✴ and Instagram✴. Both companies must fix the violations within 60 days to avoid additional and higher fines.

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Apple has been fined for its practice of restricting developers in the App Store. According to the European Commission, the company prohibited the placement of links to external sites offering alternative payment and subscription methods. This strategy violates the provisions of the DMA, which are aimed at preventing practices that limit the freedom of choice of European consumers. According to the regulator, both the seriousness and duration of the violation were taken into account when determining the amount of the fine. In addition, Apple was ordered to lift restrictions on the placement of links and promotion of third-party payment solutions.

Meta✴ was fined for using a “pay or opt-in” advertising model, which requires Facebook✴ and Instagram✴ users in the EU to either pay to opt out of advertising or agree to the processing of their personal data. The Commission found that this approach limited freedom of choice for European users. Although Meta✴ offered users who opted out the option to see less personalized advertising, the Commission found these measures insufficient. In a DMA compliance report published on March 6, the US corporation said it was receiving demands that went beyond the law.

The DMA came into force in May 2023 and aims to reduce anti-competitive behaviour in the EU digital space. The predominantly US companies recognised as “gatekeepers” under the law – Apple, Meta✴, Alphabet, Amazon, ByteDance and Microsoft – are required to comply with a series of requirements regarding the transparency and openness of their platforms. These requirements apply to key digital services, including app stores, search engines and social networks. Fines of up to 10% of global annual sales are provided for breaches of the DMA, and up to 20% for repeated violations.

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In its statement, Apple claims that implementing the changes necessary to comply with the DMA required hundreds of thousands of hours of engineering work. A company spokesperson said that Apple has implemented dozens of updates that users did not request. The company also said that it is forced to disclose its technology solutions for free, which it believes has a negative impact on the privacy, security, and quality of its products. Apple accuses the regulator of unfair regulation and plans to appeal the decision.

Meta✴, in turn, claims that the regulator’s actions effectively lead to the introduction of a tariff that increases the company’s costs many times over, forcing it to change its business model. Joel Kaplan, Meta✴’s chief lobbyist and global director, noted that restrictions on personalized advertising harm not only Meta✴ itself, but also European companies that use such mechanisms to promote their services and products. He also said that European regulators impose requirements on American companies that differ from those applied to European and even Chinese firms.

The investigation into Apple and Meta✴ was launched by the European Commission in March 2024. At the same time, similar actions were announced against Alphabet, Google’s parent company. Google is suspected of giving priority to its own services in search results and of using anti-competitive practices in the Google Play app store. According to the Commission, these actions violate the principles of fair competition and hinder third-party developers’ access to consumers.

The current sanctions are not the first cases of antitrust claims by the EU against Apple and Meta✴. Last year, Apple was fined €1.84 billion (around $2 billion) for similar practices in the App Store, following a lawsuit filed by Spotify, but that case was initiated before the DMA came into force. Meta✴ was also fined €797.7 million (around $840 million) last November for creating an unfair market advantage by integrating Facebook✴ with the Marketplace platform, and €1.2 billion (around $1.3 billion) in 2023 for illegally transferring personal data of EU citizens to the United States, which violated European data protection laws.