European Union's Digital Competition Law Hits Tech Giants Apple and Meta

On April 23, European Union regulators announced that Apple and Meta were the initial companies to be penalised for violating a new law that was designed to enhance competition in the digital economy.

This development is expected to escalate tensions with the Trump administration. For violating the 2022-passed Digital Markets Act, Apple was fined 500 million euros ($570 million), and Meta was fined €200 million ($230 million).

The goal of European legislation is to prevent large tech firms from misusing their power as digital gatekeepers, which allows them to unilaterally impose regulations on businesses and customers.

The European Commission, the executive arm of the 27-nation EU, accused Apple of violating the Digital Markets Act by limiting the way app developers may inform consumers about deals and other offers. By enforcing a "consent or pay" system that requires users to either pay a subscription fee for ad-free versions of Facebook and Instagram or consent to the usage of their personal data to target advertisements, Meta violated it.

Trade War Between EU and the US

Despite the conflict between the US and the EU over trade, tariffs, and the conflict in Ukraine, there has been some agreement on how to deal with the market dominance of the biggest digital firms in the world.

As owners of goods and services necessary for information, communication, trade, and other purposes, the tech giants have accumulated trillions of dollars in share value. Over the past year, Google has lost two significant antitrust cases in the US for abusing its dominance in the search and advertising industries.

Meta is on trial in Washington on charges that it used acquisitions to stifle competition. Apple and Amazon are also being sued for antitrust in the United States. However, the Trump administration took offence at the decision.

The United States will not allow this new type of economic extortion, according to National Security Council spokesperson Brian Hughes. Extraterritorial laws that specifically target and harm American businesses, impede innovation, and permit censorship will be acknowledged as trade obstacles and a direct danger to free civil society, he continued.

According to a February White House letter, authorities would think about taking revenge if the European Union singled out American internet firms under the Digital Markets Act or the Digital Services Act, which are laws aimed at reducing disinformation and illegal online content.

 Meta declared that it will probably challenge the decision, comparing it to imposing high tariffs on American businesses' services.

Apple to Follow Legal Path

Apple accused the commission of compelling it to make adjustments to its products that amounted to giving away its technology and said that it would appeal the ruling.

The business was fined $2 billion by the European Union last year for undercutting competitors in the music streaming market through the App Store.

In a statement, Joel Kaplan, chief global affairs officer at Meta, claimed that the European Commission is trying to hinder prosperous American corporations while permitting European and Chinese enterprises to function according to separate rules.

This is more than simply a fine. The commission's requirement that Meta should alter its business strategy amounts to a multibillion-dollar tariff on Meta and forces the company to provide a subpar service.