Apple fined €500m and Meta €200m for breach of EU law

Apple was fined €500m (R10.59bn) on Wednesday and Meta €200m (R4.23bn) as EU antitrust regulators handed out the first sanctions under landmark legislation aimed at curbing the power of Big Tech.

The EU fines could stoke tensions with US President Donald Trump who has threatened to levy tariffs against countries that penalise US companies.

The sanctions follow a year-long investigation by the European Commission, the EU executive, into whether the companies comply with the Digital Markets Act (DMA) that seeks to allow smaller rivals into markets dominated by the biggest companies.

Apple said it would challenge the EU fine.

“Today's [Wednesday] announcements are another example of the European Commission unfairly targeting Apple in a series of decisions that are bad for the privacy and security of our users, bad for products and force us to give away our technology for free,” it said.

Meta criticised the EU decision. “The European Commission is attempting to handicap successful American businesses while allowing Chinese and European companies to operate under different standards,” it said.

“This isn't just about a fine; the commission forcing us to change our business model, effectively imposing a multibillion-dollar tariff on Meta while requiring us to offer an inferior service.”

The EU competition watchdog said Apple must remove technical and commercial restrictions that prevent app developers from steering users to cheaper deals outside the App Store.

It said Meta's binary pay-or-consent model introduced in November 2023 breached the DMA. The model gives Facebook and Instagram users who consent to be tracked a free service funded by advertising revenues. Alternatively, they can pay for an ad-free service.

Meta is discussing with the EU a new version introduced in November last year. The companies have two months to comply with the orders or risk fines.

Apple avoided a fine in a separate investigation into its browser options on iPhones after making changes that allow users to switch to a rival browser or search engine more easily. Regulators said these comply with the DMA and closed the investigation on Wednesday.

The iPhone maker was still charged with breaching the DMA rules by hindering users from downloading alternative app stores and apps from the web in a practice known as sideloading.

Regulators criticised Apple's conditions, saying these disincentivise developers from using alternative app distribution channels on iOS and also requires them to opt for business terms that include a new fee called Apple's Core Technology Fee.

The EU regulator also dropped Meta's Marketplace's designation as a DMA gatekeeper because the number of users fell below the threshold.

“We have taken firm but balanced enforcement action against both companies, based on clear and predictable rules,” the commission said.

Reuters had flagged the EU decisions on Apple and Meta last month.

Reuters