Apple, Meta hit with combined €700m in fines for Digital Markets Act violations
The European Commission has fined Apple €500 million and Meta €200 million for breaches of the Digital Markets Act (DMA). The two decisions mark the first high-profile enforcements of the DMA, which can penalise companies up to 10% of their global turnover.
The DMA largely affects what the EU has terms ‘platform gatekeepers’ due to their domainance in the online space, specifically Googe parent company Alphabet, Amazon, Apple, ByteDance, Meta, and Microsoft. Such gatekeepers must seek users’ consent for combining their personal data between services. Those users who do not consent must have access to a less personalised but equivalent alternative.
Apple’s App Store steering
The action against Apple focussed on what the Cupertino-based company would see as one of its strengths: a walled garden approach software distributed through its App Store. Apple charges developers 30% of their revenue on sales through the Store.
Under the DMA, developers distributing their apps via Apple’s App Store should be able to inform customers, free of charge, of alternative offers outside the App Store, and have the ability to steer them to those offers and allow them to make purchases.
The Commission found that Apple fails to comply with this obligation. Due to a number of restrictions imposed by Apple, app developers cannot fully benefit from the advantages of alternative distribution channels outside the App Store. Similarly, consumers cannot fully benefit from alternative and cheaper offers as Apple prevents app developers from directly informing consumers of such offers.
As part of today’s decision, the Commission has ordered Apple to remove the technical and commercial restrictions on steering and to refrain from perpetuating the non-compliant conduct in the future, which includes adopting conduct with an equivalent object or effect.
The Commission has closed it’s investigation on Apple’s obligations, thanks to what it called “early and proactive engagement”.
Meta’s ‘consent or pay’ model
In November 2023, Meta introduced a binary ‘consent or pay’ advertising model. Under this model, EU users of Facebook and Instagram had a choice between consenting to personal data combination for personalised advertising or paying a monthly subscription for an ad-free service.
The Commission found that this model is not compliant with the DMA, as it did not give users the required specific choice to opt for a service that uses less of their personal data but is otherwise equivalent to the ‘personalised ads’ service. Meta’s model also did not allow users to exercise their right to freely consent to the combination of their personal data.
In November 2024, after numerous exchanges with the Commission, Meta introduced another version of the free personalised ads model, offering a new option that allegedly uses less personal data to display advertisements. The Commission is currently assessing this new option and continues its dialogue with Meta, requesting the company to provide evidence of the impact that this new ads model has in practice.
Today’s decision concerns the time period during which end users in the EU were only offered the binary ‘consent or pay’ option between March 2024, when the DMA obligations became legally binding, and November 2024, when Meta’s new ads model was introduced.
The Commission also found that Meta’s online intermediation service Facebook Marketplace should no longer be designated under the DMA. With less than 10,000 business users in 2024, Meta was found not to meet the relevant threshold giving rise to a presumption that Marketplace is an important gateway for business users to reach end users.
Apple and Meta are required to comply with the Commission’s decisions within 60 days or risk periodic penalty payments.
Executive Vice-President for Clean, Just & Competitive Transition Teresa Ribera said: “Today’s decisions send a strong and clear message. The Digital Markets Act is a crucial instrument to unlock potential, choice and growth by ensuring digital players can operate in contestable and fair markets. It protects European consumers and levels the playing field. Apple and Meta have fallen short of compliance with the DMA by implementing measures that reinforce the dependence of business users and consumers on their platforms. As a result, we have taken firm but balanced enforcement action against both companies, based on clear and predictable rules. All companies operating in the EU must follow our laws and respect European values.”
Henna Virkkunen, Executive Vice-President for Tech Sovereignty, Security & Democracy, added: “Enabling free business and consumer choice is at the core of the rules laid down in the Digital Markets Act. This includes ensuring that citizens have full control over when and how their data is used online, and businesses can freely communicate with their own customers. The decisions adopted today find that both Apple and Meta have taken away this free choice from their users and are required to change their behaviour. We have a duty to protect the rights of citizens and innovative businesses in Europe and I am fully committed to this objective.
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