In a significant move to enforce the European Union’s digital competition rules, Apple and Meta have been fined by EU regulators. The European Commission, which acts as the executive arm for the 27-nation bloc, announced on Wednesday that Apple was fined 500 million euros (approximately $571 million). The penalty was imposed because Apple allegedly prohibited app developers from directing users to cheaper options outside of its App Store. Furthermore, Meta Platforms, the parent company of Facebook and Instagram, was fined 200 million euros for mandating that users either consent to personalized ads or pay to avoid them.
Although these penalties are hefty, they are not on par with some of the earlier multibillion-euro fines levied against major tech companies for antitrust violations. Both Apple and Meta must adhere to these decisions within a 60-day period or face ongoing “periodic penalty payments,” as stated by the commission. The announcements were postponed from their original March schedule amidst escalating trade tensions between Europe and the United States, partly due to U.S. President Donald Trump’s grievances about European regulations on American companies.
The fines mark the first major enforcement actions under the EU’s new Digital Markets Act (DMA). This comprehensive set of rules aims to ensure consumers and businesses have more choices and prevent large tech firms from dominating digital markets. Henna Virkkunen, the Commission’s executive vice president for tech sovereignty, emphasized in a statement that the DMA provides citizens with control over their data and allows businesses to freely interact with 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 behavior,” Virkkunen added.
Both companies have signaled their intentions to appeal the fines. Apple argued that the commission has “unfairly targeted” it and continues to change its expectations despite Apple’s attempts to comply. Meta’s Chief Global Affairs Officer, Joel Kaplan, claimed that the commission’s actions aim to disadvantage successful American businesses while imposing different standards on Chinese and European companies.
During a press briefing in Brussels, EU commission representatives tried to downplay concerns about exacerbating trade conflicts. “We don’t care who owns a company. We don’t care where the company is located,” said commission spokesperson Thomas Regnier, emphasizing that all companies, regardless of origin, must adhere to EU rules.
The commission has accused Apple of instituting unjust rules that prevent app developers from directing customers to alternative purchasing options. The DMA stipulates that developers must have the freedom to inform consumers about cheaper options and direct them accordingly. Consequently, Apple has been ordered to eliminate technical and commercial limitations that prevent developers from pointing users to these alternatives. Apple responded by stating that it has committed substantial resources to comply with the legislation, claiming, “Despite countless meetings, the Commission continues to move the goalposts every step of the way.”
For Meta, the crux of the investigation was the company’s compliance strategy with strict European data privacy regulations. Meta offered users the choice to pay at least 10 euros ($11.40) monthly to avoid targeted ads, following a European Union court ruling requiring user consent for personalized advertising. Regulators expressed concerns that Meta’s approach didn’t allow for true freedom in consenting to data use across its services, including WhatsApp and Messenger.
In response, Meta introduced a third option in November, permitting European users to reduce personal data-based personalized ads without having to subscribe for an ad-free experience. The commission is assessing this option’s impact, with ongoing discussions with Meta, which has been asked to provide evidence of its effect on users. Kaplan remarked that the fines go beyond financial repercussions, suggesting they enforce significant operational changes on Meta. “This isn’t just about a fine; the Commission forcing us to change our business model effectively imposes a multibillion-dollar tariff on Meta while requiring us to offer an inferior service,” he stated.
Earlier this year, Apple was already subject to EU scrutiny under the DMA though it didn’t result in a fine. Instead, the EU aimed to mandate Apple to make its iPhone and iPad operating systems compatible with rival technologies, illustrating the EU’s broader commitment to fostering fair competition and innovation in the digital landscape.