Apple, Google and Meta are being investigated by the European Union for uncompetitive practices — the first such cases under a sweeping new law designed to stop big tech companies from cornering digital markets.

The European Commission — the 27-nation bloc’s executive arm — said it was investigating the companies for “non-compliance” with the Digital Markets Act.

The Digital Markets Act took full effect earlier this month and is a broad rulebook that targets big tech “gatekeeper” companies providing “core platform services”.

If they do not follow the rules they risk hefty financial penalties or face the prospect of having the businesses being broken up.

The rules have the broad but vague goal of making digital markets “fairer” and “more contestable” by breaking up closed tech ecosystems that lock consumers into a single company’s products or services.

European Commission Vice President Margrethe Vestager, the EU’s competition chief, said the commission had heard complaints tech companies have have fallen short.

“Today, we decided to investigate a number of these suspected non-compliance issues. And as we unearth other problems, we will tackle those too,” Ms Vestager said.

She said the companies have been ordered to hold on to certain documents that the commission can access in current and future investigations.

App issues at core of investigation

Regulators are looking into whether Google and Apple are fully complying with the DMA’s rules requiring tech companies to allow app developers to direct users to cheaper options available outside their app stores.

The commission said it’s concerned the two companies are imposing “various restrictions and limitations” including charging recurring fees that prevent apps from freely promoting offers.

Google is also facing scrutiny for not complying with DMA provisions that prevent tech giants from giving preference to their own services over rivals. The commission said it is concerned Google’s measures will result in third-party services listed on Google’s search results page not being treated “in a fair and non-discriminatory manner”.

Google said that it has made “significant changes” to the way its services operate in Europe to comply with the DMA.

Google’s director of competition, Oliver Bethell, said the company would “continue to defend” the way it operates in coming months.

The commission is also investigating whether Apple is doing enough to allow iPhone users to easily change web browsers.

It is already facing a lawsuit in the US for allegedly cornering the smartphone market there.

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Apple said it is confident that its plan complies with the DMA, and it will “continue to constructively engage with the European Commission as they conduct their investigations”. The company said it has created a wide range of new developer capabilities, features, and tools to comply with the regulation.

The commission is also looking into Meta’s option for European users to pay a monthly fee for ad-free versions of Facebook or Instagram, so they can avoid having their personal data used to target them with online ads.

“The commission is concerned that the binary choice imposed by Meta’s ‘pay or consent’ model may not provide a real alternative in case users do not consent, thereby not achieving the objective of preventing the accumulation of personal data by gatekeepers,” it said.

Meta said it will “engage constructively” with the commission.

“Subscriptions as an alternative to advertising are a well-established business model across many industries, and we designed Subscription for No Ads to address several overlapping regulatory obligations, including the DMA,” it said in a prepared statement.

The commission said it aims to wrap up its investigations within 12 months.

AP/ABC