The European Union has slapped Apple and Meta with significant fines for violating the Digital Markets Act (DMA), marking the first-ever penalties under the new antitrust law. Apple has been fined €500 million (approximately $570 million) for its App Store "anti-steering" practices, while Meta has been fined €200 million (approximately $230 million) for its "pay or consent" ad model on Facebook and Instagram.

The DMA, which became law in May 2023, aims to increase competition across digital markets within the EU by regulating the behavior of "gatekeeper" companies, including Apple, Meta, Alphabet, Amazon, ByteDance, and Microsoft. These companies are required to comply with rules intended to reduce anticompetitive behavior, and can be charged up to 10% of their annual global revenue for DMA violations, and up to 20% for repeat offenses.

Apple's fine is related to its App Store restrictions, which prevented developers from promoting pricing or alternative distribution channels within their apps, or freely linking out to web pages where customers can pay or subscribe to their services. In its compliance report, Apple argued that the measures it has taken to open up its App Store place users and developers at greater risk, and that it will "continue to urge the European Commission to allow it to take other measures to protect its users."

Meta's fine, on the other hand, is related to its "pay or consent" ad model, which forced Facebook and Instagram users to either pay a subscription fee to remove ads or consent to having their personal data used for ad-supported versions of the platforms. To address the DMA compliance violations, Meta has allowed Facebook and Instagram users within the EU who don't pay to remove ads to see fewer unskippable, full-screen "personalized ads."

The initial compliance investigations into Apple and Meta were announced in March 2024, alongside plans to investigate Google's parent company Alphabet over concerns regarding treating its own services more favorably in Search rankings compared to services provided by third-party rivals. Like Apple, Google is also being scrutinized over "anti-steering" practices in its app marketplace.

The fines announced today are significantly lower than the maximum penalties of around $16 billion for Meta and $39 billion for Apple based on 2024 earnings. The Financial Times reported in January that the EU was planning to soften its regulatory practices around Big Tech following an increase in pressure from the US, with the new EU Commission that took office in December reportedly being more focused on enforcing compliance than issuing hefty fines.

This is not the first time Apple and Meta have faced antitrust penalties in the EU. Apple was previously fined €1.84 billion (approximately $2 billion) last year over the App Store's anti-steering practices following an antitrust lawsuit filed by Spotify, while Meta was fined €797.7 million (approximately $840 million) in November last year for giving itself unfair market advantages by linking Facebook and Marketplace, and €1.2 billion (approximately $1.3 billion) in 2023 for transferring the Facebook data of EU citizens to the US.

The fines come as tensions are rising between European policymakers and US President Donald Trump, who has befriended deep-pocketed US tech CEOs that have likened EU fines placed against their companies to a form of taxation. The EU's move to impose fines on Apple and Meta under the DMA is seen as a significant step in regulating the behavior of Big Tech companies and promoting fair competition in the digital market.

The implications of these fines are far-reaching, and will likely have a significant impact on the way tech companies operate in the EU. As the EU continues to crack down on anticompetitive behavior, it remains to be seen how tech giants will adapt to the new regulatory landscape. One thing is certain, however: the EU's commitment to promoting fair competition and protecting consumer interests will continue to shape the tech industry in the years to come.