EU Imposes €700 Million Fines on Apple and Meta Amid Rising Tensions with the US
The European Commission has announced substantial financial penalties against tech giants Apple and Meta, the parent company of Facebook and Instagram. This decision comes under the Digital Markets Act (DMA) and amid sensitive diplomatic relations between Brussels and Washington.
Details of the Fines
For the first time, the penalties are based on the Digital Markets Act (DMA), a new European regulation aimed at regulating the practices of dominant digital platforms.
- Apple faces a fine of €500 million for imposing restrictive clauses in its App Store, effectively preventing app developers from offering competitive alternatives to users.
- Meta is ordered to pay €200 million for combining users’ personal data for advertising purposes without their explicit consent, violating France’s newly enacted rules.
Minimal Impact on Tech Giants
Despite the sanctions being described as “firm and balanced” by Competition Commissioner Teresa Ribera, the fines are relatively modest compared to the revenues generated by these corporations. In 2024, Apple reported a net profit of $93.7 billion while Meta’s profit stood at $62.4 billion, thus diminishing the immediate financial impact of these penalties.
Compliance Deadline Imposed
Although both companies have begun steps towards compliance, highlighted by Apple’s recent iOS 18.2 update, these adjustments are deemed insufficient in light of DMA requirements. If neither company complies with the European directives within 60 days, they could face further sanctions of up to 10% of their annual global revenue.
A Sensitive Diplomatic Landscape
The timing of these decisions is critical, as the European Union negotiates with the United States regarding the reduction of tariffs imposed by former President Donald Trump. These tariffs have been criticized for placing undue burdens on American digital services in Europe.
While Apple has announced its intention to appeal the decision, Meta has responded more vehemently, accusing Brussels of favoring European and Chinese firms at the expense of American companies. However, Meta has also put forth a proposal to adjust its practices, which is under review by the Commission. If deemed adequate, this could potentially terminate the ongoing proceedings.
More Penalties on the Horizon?
Apple and Meta are not the only tech giants under scrutiny; Google (Alphabet) faces numerous investigations and risks a breakup of part of its operations in the ongoing antitrust case in the U.S.
In France, over 200 media outlets, including TF1, Le Figaro, and France Télévisions, have recently initiated legal action against Meta for allegedly illegal advertising practices.
Additionally, the European Commission is already contemplating a new procedure against Apple for its failure to provide alternatives to the App Store on iPhones, further contradicting DMA obligations.
These developments hint at an ongoing scrutiny of major tech firms, suggesting that this may just be the beginning of a longer regulatory battle.
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