Apple, Google Set To Be Hit By First Probes Under EU Digital Law

(Bloomberg) -- Apple Inc. and Alphabet Inc.’s Google are set to face full-blown European Union investigations into their compliance with a new law reining in the power of Big Tech, paving the way for potentially hefty fines.

The European Commission is gearing up to announce probes into the firms’ compliance with the bloc’s Digital Markets Act in the coming days, according to people familiar with the matter. 

Apple and Google’s new fees, terms and conditions for app store developers will come under the EU’s focus, said the people, who spoke on condition of anonymity. 

A proposal from Meta Platforms Inc. to leverage a monthly fee on users for accessing Facebook and Instagram could also garner future EU scrutiny under the bloc’s new powers, the people added. 

The heightened EU scrutiny against Apple comes as the US Justice Department and 16 attorneys general sued the firm on Thursday, accusing the iPhone maker of violating antitrust laws by blocking rivals from accessing hardware and software features on its popular devices. 

Read more: Justice Department Sues Apple in Antitrust Case Over iPhone

The DMA — which lays out a series of dos and dont’s for some of the world’s largest tech platforms — allows the bloc to levy hefty penalties of as much as 10% of a company’s total annual worldwide revenue, and up to 20% for firms who repeatedly flout the rules. After starting formal investigations, regulators aim to wrap up their final decisions within a period of 12 months. 

The commission in Brussels declined to comment. Apple, Google and Meta didn’t immediately respond to a request for comment. 

Apple, fresh from its €1.8 billion ($2 billion) EU fine for blocking music streaming apps from informing users of cheaper deals, has been under heavy scrutiny since the DMA came into full effect on March 7.   

Spotify, which triggered the initial EU complaint over the App Store, said Apple’s DMA proposals to levy additional charges on developers were “unacceptable” and “nonsensical” and requested a meeting with the EU’s competition chief Margrethe Vestager. Apple had proposed to scrap the 30% commission it has historically imposed, but also added new charges. 

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