Apple was fined for failing to comply with rules that let app developers inform users of alternative services and purchase options for their services outside its App Store.
Meta, meanwhile, was found to have breached data privacy rules, specifically, forcing users to either consent to have their data used for personalised advertising or pay a monthly subscription for an ad-free service.
Henna Virkkunen, MEP and executive VP for tech sovereignty, security and democracy, said: “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.”
Apple's ‘steering terms’
The decision against Apple focused on ‘steering’ or the ability to allow app developers to encourage users to services outside of its ecosystem, such as purchasing microtransactions for freemium experiences.
Under the terms of the DMA, platforms like Apple’s App Store must allow app developers to steer users to alternative channels or subscription options, something it claimed failed to abide by.
“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,” the Commission’s decision reads. “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 the decision, Apple has been ordered to remove the technical and commercial restrictions on steering and to refrain from perpetuating the non-compliant conduct.
The €500 million the firm faces “takes into account the gravity and duration of the non-compliance”, the Commission said.
Meta's ‘consent or pay’ model
Beyond steering, the DMA forces platforms to seek users' consent for combining their personal data between services, with those that decline providing a less personalised but equivalent alternative.
The Commission took issue with what it described as Meta’s “Consent or Pay” advertising model, whereby Instagram and Facebook users in the EU would have to pay if they didn’t want to have their personal data used for targeting ads.
Such a model was found not to have been compliant under the DMA, as Meta failed to provide users with a required opt-out service.
After a lengthy back-and-forth, Meta introduced another version of the model, this time using less personal data to display advertisements.
Lawmakers are still investigating this new system, but still opted to fine the social media giant €200 million, which “also takes into account the gravity and duration of the non-compliance”.
Both firms have been given 60 days to comply with the decisions or face further punishment, including periodic penalty payments of up to 5% of the average daily turnover.
Responding to the decision, Joel Kaplan, Meta’s chief global affairs officer, said the Commission was “attempting to handicap successful American businesses while allowing Chinese and European companies to operate under different standards”.
“This isn’t just about a fine; the Commission forcing us to change our business model effectively imposes a multi-billion-dollar tariff on Meta while requiring us to offer an inferior service. And by unfairly restricting personalised advertising the European Commission is also hurting European businesses and economies,” said Kaplan, a former Bush White House Official who took over from Nick Clegg earlier this year.
Investigations into both Apple and Meta were opened last March, with the pair the first to be hit with fines for non-compliance under the Digital Markets Act.
“Today’s decisions send a strong and clear message,” said Teresa Ribera, the EVP for clean, just and competitive transition. “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.”
