The European Union imposed significant penalties on two American tech giants Wednesday, fining Apple $570 million (€500 million) and Meta $228 million (€200 million) for separate violations of the bloc’s digital market rules. The move potentially heightens tensions between the EU and the U.S. during ongoing tariff and trade negotiations.
Breaking Down the Violations
The European Commission concluded its year-long investigation into both companies’ compliance with the Digital Markets Act (DMA), legislation designed to create a more level playing field for smaller companies competing against tech behemoths.
Apple’s penalty stems from restrictions placed on iPhone and iPad app developers that limit their ability to “fully benefit from the advantages of alternative distribution channels” beyond the App Store. The commission highlighted that these practices prevented consumers from accessing “alternative and cheaper offers” by blocking developers from directly informing users about such options.
The EU has ordered Apple to remove these “technical and commercial restrictions” and maintain compliance moving forward.
Meta’s fine addresses its “binary ‘Consent or Pay'” model for Facebook and Instagram, which gives users two choices: use the platforms for free with personalised ads or pay for an ad-free experience. Regulators determined this approach violates the DMA because it fails to provide users with a free version that “uses less of their personal data.”
Ongoing Regulatory Scrutiny
The Commission continues to examine Meta’s November 2024 compromise proposal for a “free personalised ads” version of its platforms that “allegedly uses less personal data to display advertisements.”
Company Responses
Apple plans to appeal the decision, stating it represents “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.”
Meta’s chief global affairs officer indicated the company would likely appeal as well, comparing the EU’s rules to a substantial tariff: “The commission forcing us to change our business model effectively imposes a multibillion-dollar tariff on Meta while requiring us to offer an inferior service.”
Trade Tensions Context
These fines come during a 90-day pause in President Donald Trump’s reciprocal tariffs against the EU and other nations. While both sides have expressed interest in negotiations with the EU also pausing planned countermeasures against U.S. imports, EU officials have suggested that any escalation could lead to targeting U.S. services exports, including Big Tech companies.
Since Trump’s election victory, numerous tech executives have approached him with concerns about EU regulations affecting their operations. The Trump administration has warned the bloc against imposing what it characterises as “unfair fines” and “onerous international rules” on American companies.