The European Union has issued its first major fines under the new Digital Markets Act (DMA), imposing a €500 million penalty on Apple and a €200 million fine on Meta.
Announced on Wednesday, these sanctions mark a significant step in the EU’s efforts to regulate Big Tech and ensure fair digital competition across the region.
Rising Trade Tensions
The fines come at a tense time for international trade, with U.S. President Donald Trump reportedly considering retaliatory tariffs on countries that punish American tech firms. If such measures are implemented, they could escalate into a broader transatlantic tech-trade dispute.
Apple and Meta Push Back
Both Apple and Meta strongly criticized the EU’s actions. In a firm statement, Apple accused the European Commission of being unfair:
“These decisions are bad for the privacy and security of our users, bad for products, and force us to give away our technology for free,” the company said.
Apple also argued that the EU is unfairly targeting successful U.S. companies, while European and Chinese firms face fewer restrictions.
Meta, the parent company of Facebook and Instagram, also condemned the ruling. The company had introduced a “pay-or-consent” model in late 2023, which allowed users to either accept tracking for a free, ad-supported experience or pay for an ad-free version.
The EU concluded that Meta’s model violates the DMA and has given the company two months to make changes or face daily fines.
What the EU Wants Changed
EU regulators said Apple must lift restrictions that prevent app developers from guiding users to cheaper subscription deals outside of the App Store.
They also ruled that Meta’s “pay-or-consent” model breaches the DMA’s fairness principles, saying it pressures users to give up their privacy to access a free service.
Both companies now have two months to comply with the orders or risk additional daily penalties.
Apple avoided a separate fine after making changes that allow iPhone users to choose different browsers and search engines more easily. Regulators said this action met the DMA’s requirements, and the related investigation was closed.
However, Apple still faces charges for hindering sideloading, which is the ability for users to download apps from outside the App Store. The EU criticized Apple’s newly introduced Core Technology Fee, saying it discourages developers from using alternative app stores on iOS.
Meanwhile, Meta’s Marketplace platform has been dropped from the list of DMA gatekeepers after its user numbers fell below the required threshold.
More Enforcement Expected
EU officials made it clear that this is just the beginning. Investigations are ongoing into Google’s advertising business and X (formerly Twitter), owned by Elon Musk.
EU Competition Commissioner Teresa Ribera stated:
“We have taken firm but balanced enforcement action… All companies operating in the EU must follow our laws and respect European values.”
European lawmakers, such as Andreas Schwab, warned against linking regulatory decisions to trade disputes:
“There can be no leeway in enforcement… Linking decisions to trade policy is dangerous for the whole EU construction,” he said.
Background: The Digital Markets Act
The Digital Markets Act, which came into force in 2023, aims to reduce the dominance of large tech platforms and create fairer opportunities for smaller digital players.
Wednesday’s fines followed a year-long investigation into whether Apple and Meta were complying with the new rules. While €700 million in combined penalties is significant, it’s lower than some of the fines issued in the past under former EU antitrust chief Margrethe Vestager.
According to insiders, the relatively modest fines reflect the EU’s focus on promoting compliance rather than punishing companies—at least for now.
