Hooboy—the European Commission fired an antitrust broadside against some of the biggest tech firms today that could put a major crimp on their businesses. First, let’s quickly break down these three investigations under the new EU Digital Markets Act, then consider the bigger picture.
For Apple, I’ll begin with what this is not: an investigation into the “core technology fee” that Apple levies on app installations from developers who dare to use the third-party app stores that, under the DMA, must be allowed on iOS in Europe. The Commission is still looking into that matter using “investigatory steps” that fall short of a formal investigation, for now.
What was announced today was a two-pronged probe into Apple’s suspected disrespecting of users’ choices—making it too difficult for them to change default iOS settings, search engines, and browsers, and making it impossible to uninstall core apps like Photos—along with failing to let developers freely steer their users to off-platform offers.
If those anti-steering tactics sound familiar, that’s because they’re essentially the same reason the Commission just hit Apple with a $2 billion fine under pre-DMA antitrust law and the same reason why Epic Games (aided by Meta, Microsoft, and others) is trying to get a California court to force Cupertino to honor a 2021 injunction about directing users to alternative payment methods. In case you’re wondering, these are among the few Apple tactics that don’t form part of the huge new antitrust case that hit the firm in the U.S. last week.
Apple can at least console itself with the knowledge that the Commission isn’t only interested in its potential anti-steering tactics—Android proprietor and Google-parent Alphabet is now being probed over the same thing. What’s more, the Commission wants to find out if Google is “self-preferencing” its own vertical search services like Shopping, Flights, and Hotels in its search results.
“Didn’t Google get a $2.7 billion fine over this in 2017?” I hear you ask. Yes, it did, specifically regarding the shopping vertical. Now basically the same issue is back, with a new law in play, and with other industry-specific services joining the party.
As for Meta, this one is the logical conclusion of how antitrust and privacy law have been bleeding into each other over the last few years. In order to comply with EU data protection laws, Meta last year started charging European Facebook and Instagram users a monthly fee if they didn’t agree to be tracked for ad-targeting purposes. This “pay or consent” strategy attracted a wave of privacy complaints across the EU, and now it’s being investigated under the bloc’s new antitrust law, which is supposed to stop companies like Meta from abusing their dominant market positions to gather personal data.
A Meta spokesperson claimed today that the Subscription for No Ads option had been designed to “address overlapping regulatory obligations, including the DMA.” Apple also said it was “confident” that it was DMA-compliant. Both companies promised to constructively engage with the Commission during the investigations. No comment from Alphabet just yet.
Don’t get me wrong, each one of these cases is fascinating in its own right. But the really interesting thing overall is the urgency with which the Commission has decided to brandish its brand new club, the DMA.
When the General Data Protection Regulation came into effect in 2018, the enforcers were national privacy authorities who were under-resourced and understandably wary of getting into expensive legal battles with some of the world’s biggest companies. As a result, those regulators took their sweet time building their cases, and it was more than three years before meaningful GDPR enforcement began.
So, with the DMA and its companion law—the Digital Services Act, which tackles illegal content on platforms—the Commission has made itself the enforcer. The true extent of the Commission’s capacity in terms of both staff and funding is still an open question, but it has clearly opted to hit hard and early. In a press conference today, competition commissioner Margrethe Vestager pointed out that the aim of the law was to get compliance rather than fines (though the DMA does allow fines as high as 10% of global annual revenue)—and the sooner this happens, the better for consumers, she added. The investigations could even wrap up within a year, which is lightning speed for such things.
Of course, Big Tech’s lobbyists are appalled. “Launching the first preliminary investigations under the Digital Markets Act (DMA) just days after the compliance deadline throws a wrench into the idea of companies and the European Commission working together to implement the DMA successfully,” spluttered Daniel Friedlaender, the Europe chief of the Computer & Communications Industry Association, in a statement—as though these companies hadn’t had a year and a half to prepare for the compliance date, after the DMA was signed into law in September 2022.
Everyone knew this moment was coming. The Big Tech firms carefully crafted their DMA compliance measures to try to get away with as much as they could. The Commission is now pushing back in spectacular fashion. More news below.
David Meyer
Want to send thoughts or suggestions to Data Sheet? Drop a line here.
NEWSWORTHY
Telegram’s Spanish suspension. Telegram is to be temporarily blocked in Spain, over alleged copyright violations. Reuters reports that the Spanish High Court today ordered the country’s mobile operators to suspend the app, which is used by nearly a fifth of the populace. This may put a crimp in Telegram’s plans to hold an IPO in the foreseeable future, as might the service’s enthusiastic usage by drug dealers, prostitutes, and terrorists.
China’s chip crackdown. Beijing isn’t just telling state employees to ditch their iPhones—as the Financial Times reports, it’s now also phasing out Intel and AMD processors, and Microsoft’s Windows OS, in government computers. The Register quips that 2024 might actually be the fabled year of Linux on the desktop after all, in China at least. Meanwhile, in the U.K. there’s political uproar over Chinese cyberattacks against British lawmakers and voters, whose personal details have apparently all been accessed.
Baidu’s Apple bump. Speaking of iPhones in China, Baidu’s Hong Kong share price rose by more than 2.5% today following a report that the company may become Apple’s local AI partner. The Wall Street Journal reports that this could give Baidu a “big boost” in China’s fiercely competitive large language model market. As for Apple’s non-Chinese AI partners, Bloomberg reports that the company has been talking to Anthropic as well as to OpenAI and Google.
ON OUR FEED
“No one should fear a knock at the door from police simply because of what the YouTube algorithm serves up.”
—Albert Fox-Cahn, executive director at the Surveillance Technology Oversight Project, comments in a Forbes article on the revelation that U.S. federal investigators ordered Google to identify all YouTube users who watched certain videos on the platform.
IN CASE YOU MISSED IT
TikTok regulation bill’s future looking wobbly in Senate as calls—and threats—pour in: ‘OK, listen, if you ban TikTok I will find you and shoot you’, by the Associated Press
Tesla boss Elon Musk trolls Boeing, but it’s his own growth story where the wheels are coming off, by Christiaan Hetzner
The U.S. could need the equivalent of 40 new nuclear plants over the next 5 years, by one estimate—and power hogs crypto and cannabis are to blame, by Irina Ivanova
Do Kwon—the crypto fugitive U.S. prosecutors want to try for $40B collapse of TerraUSD—released from Montenegro prison, by Bloomberg
Microsoft’s Steve Ballmer was once Bill Gates’ assistant, now he’s the 6th richest person in the world. Here are his 5 tips for success, by Sunny Nagpaul
BEFORE YOU GO
AI muzzled in cartoons. Only humans will be allowed to be voice actors in animated TV shows, per the terms of new three-year contracts negotiated by SAG-AFTRA, the actors’ guild. As Variety notes, this actually goes a step further than the contracts that resolved last year’s monthslong actors’ strike. Studios will still be allowed to create AI-generated voices that have been trained on past performances by real people, but those voices can’t resemble those of actual actors or their characters.
This is the web version of Data Sheet, a daily newsletter on the business of tech. Sign up to get it delivered free to your inbox.