The European Union (EU) has launched investigations into the marketing and ranking practices of major tech companies Apple, Google, Meta (formerly Facebook), and Amazon. The probes focus on potential violations of the recently enacted Digital Markets Act (DMA), a landmark piece of legislation designed to curb the dominance of Big Tech and foster a more competitive digital landscape.
The EU Commission, the bloc's executive arm, announced the investigations on March 25th, 2024. The commission suspects that these companies' practices may not comply with the DMA's regulations, which aim to create a level playing field for all businesses operating within the EU's digital market.
Specifically, the investigations will examine whether these tech giants prioritize their own services within their platforms, a practice known as "self-preferencing." For instance, the EU will probe how Google ranks search results, scrutinizing whether it favors its own services like Google Shopping or Google Flights over those offered by competitors. Similarly, the commission will investigate Apple's App Store rules to determine if they unfairly disadvantage app developers by directing users towards Apple's own payment systems or hindering the functionality of competing apps.
The DMA also prohibits "gatekeepers," companies deemed to hold significant power within the digital market, from engaging in practices that restrict user choice. This includes practices that make it difficult for users to switch between different platforms or services. In this vein, the EU will examine Meta's "pay-or-consent" model, which has been criticized for potentially limiting user control over their data.
Fines for violations of the DMA can be substantial, reaching up to 10% of a company's global annual turnover. The EU Commission aims to conclude these investigations within a year.
These investigations mark a significant step in the EU's efforts to rein in the power of Big Tech and promote a more equitable digital market. The DMA represents a new chapter in the ongoing saga of regulating tech giants, and the outcome of these investigations will be closely watched by industry players and policymakers around the world.