European Digital Markets Regulation Secures Initial Victories
Published on April 23, 2025
The European Commission slaps colossal fines on Apple and Meta for DMA breaches
In a groundbreaking move today (23 April), the European Commission announced that tech titans Apple and Meta have made a mockery of key obligations under the Digital Markets Act (DMA), resulting in a combined EUR 700 million fine. Executive Vice-President for Clean, Just and Competitive Transition Teresa Ribera called the penalties a "serious wake-up call," as Apple faced a EUR 500 million fine for screwing up fair competition within its App Store, while Meta copped a EUR 200 million pounding for ignoring users' privacy preferences. These decisions mark the first non-compliance penalties issued under the DMA, which got off the ground in May 2023 and became fully applicable from March 2024. Designed to level the playing field in digital markets, the Act puts a magnifying glass on gatekeepers - companies deemed crucial for digital commerce.
APPLE'S GREEDY GRAB FOR CONTROL
The Commission discovered that Apple intentionally smothered App Store competitors by imposing restrictions that impeded app developers from informing consumers about alternate purchasing options outside of Apple's ecosystem. Teresa Ribera's team stated, "Due to Apple's high-handed tactics, app developers can't fully enjoy the advantages of alternative distribution channels outside the App Store, and consumers can't benefit from cheaper offers because Apple won't let developers inform them directly."
The Commission deemed these restrictions unnecessary and excessive, so they ordered Apple to wipe out barriers that prevent steering and prohibited similar conduct in the future. Fortunately, the Commission decided to close a separate investigation into Apple's user choice obligations, commending the company for early engagement to address compliance issues.
META'S HAM-FISTED HANDLING OF USER DATA
The fine for Meta stems from the implementation of its "Consent or Pay" model, rolled out in November 2023. This brute approach forced users to either agree to the use of their personal data for targeted advertising or fork out for an ad-free experience. The Commission noted, "Meta's approach falls short of DMA requirements, which oblige gatekeepers to provide users with an equivalent, less data-intensive alternative without resorting to coercion."
Although Meta tweaked its model in November 2024 to introduce a less personal-data-hungry version, the decisions focus on the period of non-compliance from March to November 2024. The Commission is still figuring out whether the updated model complies with DMA standards and has asked for additional evidence from Meta.
On top of the fine, the Commission concluded that Meta's online intermediary shopping service, Facebook Marketplace, no longer qualifies for designation under the DMA, following a request from Meta to reconsider the service's status. The Commission agreed, citing a noticeable decrease in business user activity. Marketplace reportedly only served fewer than 10,000 business users in 2024 - a significant drop from the threshold required for continued designation.
TIME TO SHAPE UP OR SHIP OUT
Both Apple and Meta are now in the hot seat to get their houses in order within 60 days or face continuous penalty payments. The Commission remains committed to ongoing dialogue to ensure both tech titans comply fully with the DMA.
Commenting on the decisions, Henna Virkkunen, Executive Vice-president for Tech Sovereignty, Security and Democracy, wrote, "Promoting free business and consumer choice is what the DMA rules are all about." She added, "Today's decisions show that Apple and Meta have been stealing consumers' power to choose, and they need to change their ways."
Teresa Ribera chipped in, "Every company doing business in the EU needs to understand that they must play by our rules and uphold European values."
Both companies have expressed their intention to challenge the fines, criticizing the DMA as overly harsh in its enforcement. However, the EU highlighted that fines (capped at 10% of global turnover) were reduced due to the DMA's novelty, taking into consideration only the severity of the breaches.
- Teresa Ribera's team stated that due to Apple's prohibitive actions, app developers were hindered from informing consumers about cheaper purchasing options outside Apple's ecosystem, which violates the spirit of the Digital Markets Act (DMA) as it prevents fair competition online.
- The Commission's fine for Meta was issued due to its "Consent or Pay" model, wherein users were compelled to either agree to the use of their personal data for targeted advertising or pay for an ad-free experience. This approach contravenes the DMA requirements, which mandate that gatekeepers offer users an equivalent, less data-intensive alternative without coercion.
- Meta's online intermediary shopping service, Facebook Marketplace, no longer meets the criteria for designation under the DMA following a review, as the service reportedly only served fewer than 10,000 business users in 2024 – significantly below the required threshold for continued designation, according to the European Commission.
