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By Shane Croucher and Hugh Cameron
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The European Commission has fined the U.S. tech giants Apple and Meta hundreds of millions of dollars for breaching its digital market rules.
Apple was fined €500 million ($570 million) for preventing app makers from pointing users to cheaper options outside its App Store, while Meta was hit with a €200 million ($228 million) fine for forcing Facebook and Instagram users to choose between seeing adverts or paying to avoid them.
Why It Matters
The fines come as the European Union (EU) tries to negotiate new trade terms with President Donald Trump's administration, which has hit the bloc with several tranches of tariffs this year.
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The EU has threatened countermeasures, and has also offered "zero-for-zero" tariffs on industrial goods to encourage Trump to lower his reciprocal tariffs on the bloc, though these have been rejected.
Trump has frequently accused the EU of abusing the U.S. on trade and of unfairly closing off its market to American businesses.
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What To Know
On Wednesday, the European Commission announced the fines for violating the Digital Markets Act (DMA), a landmark piece of legislation adopted in 2022, which was designed to curb anti-competitive practices by major tech companies. The fines mark the first enforcement actions targeting non-compliance under this legislation.
In March, 2024, the Commission launched non-compliance investigations into Apple's App Store steering policies and Meta's "pay or consent" model. In June and July, 2024, it notified Apple and Meta of its preliminary findings that both companies had violated the DMA.
According to its announcement on Wednesday, Apple has been fined for violating its "anti-steering obligation" under the DMA, and for restricting app developers from directing users to alternative purchasing options outside the App Store.
"Due to a number of restrictions imposed by Apple, app developers cannot fully benefit from the advantages of alternative distribution channels outside the App Store," the announcement read.
"Similarly, consumers cannot fully benefit from alternative and cheaper offers as Apple prevents app developers from directly informing consumers of such offers. The company has failed to demonstrate that these restrictions are objectively necessary and proportionate."
Meta was fined for its "consent or pay" model, which required users to either agree to share their data with the company or opt to pay for an ad-free experience, a practice the Commission deemed non-compliant with the DMA.
"The fine imposed on Meta also takes into account the gravity and duration of the non-compliance," the Commission said.
What People Are Saying
Teresa Ribera, Executive Vice-President of the European Commission for Clean, Just and Competitive Transition, said: "Today's decisions send a strong and clear message. The Digital Markets Act is a crucial instrument to unlock potential, choice and growth by ensuring digital players can operate in contestable and fair markets. It protects European consumers and levels the playing field. Apple and Meta have fallen short of compliance with the DMA by implementing measures that reinforce the dependence of business users and consumers on their platforms. As a result, we have taken firm but balanced enforcement action against both companies, based on clear and predictable rules. All companies operating in the EU must follow our laws and respect European values."
Joel Kaplan, Chief Global Affairs Officer at Meta, said in a statement: "The European Commission is attempting to handicap successful American businesses while allowing Chinese and European companies to operate under different standards. This isn't just about a fine; the Commission forcing us to change our business model effectively imposes a multi-billion-dollar tariff on Meta while requiring us to offer an inferior service. And by unfairly restricting personalized advertising the European Commission is also hurting European businesses and economies."
A representative of Apple told Newsweek: "Today's announcements are yet 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. We have spent hundreds of thousands of engineering hours and made dozens of changes to comply with this law, none of which our users have asked for. Despite countless meetings, the Commission continues to move the goal posts every step of the way. We will appeal and continue engaging with the Commission in service of our European customers."
Vice President JD Vance said at the Artificial Intelligence Action Summit in Paris in February: "The Trump Administration is troubled by reports that some foreign governments are considering tightening the screws on U.S. tech companies with international footprints. Now, America cannot and will not accept that, and we think it's a terrible mistake not just for the United States of America, but for your own countries."
What Happens Next?
Both Apple and Meta are required to pay the fines within 60 days or risk "periodic penalty payments," the Commission said. It added that under the DMA, the Commission is entitled to fine companies up to 10 percent of their global annual turnover.
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