Apple and Meta have officially become the first tech giants to face substantial penalties under the European Union’s sweeping new Digital Markets Act (DMA), signaling a new era of regulatory enforcement aimed at curbing Big Tech dominance.

The European Commission today announced that Apple will pay a €500 million (~$570 million) fine over its App Store “anti-steering” practices, which prevented developers from informing users about cheaper subscription options outside the App Store. Meta was fined €200 million (~$230 million) for its controversial “pay or consent” ad model on Facebook and Instagram, which regulators say violates users’ freedom of choice regarding personal data use.

Both companies have been given 60 days to comply or risk additional periodic penalties. Apple and Meta have already signaled their intention to appeal, criticizing the rulings as harmful to innovation and user experience. Apple claims it has “spent hundreds of thousands of engineering hours” to comply, while Meta argues the EU is “unfairly restricting personalized advertising,” harming small European businesses.

The DMA, enacted in May 2023, targets so-called “gatekeepers” — firms with entrenched market positions such as Apple, Meta, Amazon, Alphabet, ByteDance, and Microsoft. The law is intended to foster fairer competition by preventing these tech giants from locking users and developers into their ecosystems or abusing their dominance.

European Commission officials said these rulings affirm that “free business and consumer choice” is central to the DMA, and that Apple and Meta must reform their platforms to align with user rights and competition law. Notably, Apple has been ordered to remove all App Store restrictions that hinder developers from linking to alternative payment methods.

This isn’t Apple’s first EU antitrust run-in. Last year, it was fined nearly €2 billion in a similar case filed by Spotify. Meta, meanwhile, faced over €2 billion in fines across several privacy-related violations in 2023.

While today’s fines are significant, they fall short of the maximum potential penalties — around $39 billion for Apple and $16 billion for Meta — based on annual revenues. Analysts suggest the EU may be favoring a strategy of enforceable compliance over shock-value fines, possibly to ease transatlantic tensions amid mounting US political pressure.

As regulatory heat intensifies, the world is watching how the DMA will reshape the global tech landscape — and how the gatekeepers will respond.

🔗 Source – The Verge