EU-Commission opens first DMA investigations against Apple, Meta and Alphabet

Shortly after the Digital Markets Act ("DMA") was activated at the beginning of March, the EU-Commission is already flexing its muscles: On 25 March 2024, the EU-Commission opened a total of five investigations against the three companies Alphabet, Apple and Meta classified as "gatekeepers" on suspicion of inadequate implementation of the obligations imposed on them by the DMA. The gatekeepers now face substantial fines. In addition, affected companies and users could actively claim their DMA rights and, if necessary, enforce them in court. 

Non-compliance with DMA obligations in five cases

In September 2023, the EU-Commission had already named Amazon, Apple, Microsoft, Meta, ByteDance and Alphabet as "gatekeepers". The DMA imposes certain obligations and prohibi-tions on gatekeepers (Articles 5, 6, 7 DMA) in order to ensure more competition in digital mar-kets. Designated gatekeepers are obliged, for instance, to 

• enable end users to uninstall pre-installed software and apps,
• allow business users to offer their services and products on third-party platforms at differ-ent prices or conditions,
• not to favor their own services and products over those of third parties,
• enable end users to transfer their data to other platforms or services,
• ensure interoperability with third-party services,
• apply fair, reasonable and non-discriminatory general terms and conditions to business users' access to software applications, online search engines and online social network services.

The gatekeepers had six months to implement the obligations under the DMA. However, Apple, Meta and Alphabet appear to have so far failed to fulfil these obligations adequately, which is why the Commission has now opened a total of five investigations against these three gatekeepers.

Apple and Alphabet: Suspected restriction of control and supply options for app developers

In two investigations against Alphabet and Apple, the EU Commission is investigating the suspicion that the two gatekeepers are still not permitting third-party app developers on their platforms without discrimination by restricting the ability of app developers to freely communicate and advertise their own offerings, including by introducing different fee models. The DMA stipulates that gatekeepers must allow app developers to direct consumers to offers outside the gatekeepers' app stores free of charge (Article 5 (4) DMA).

Alphabet: Suspicion of favoring its own services (self-preferencing)

The reason for further investigations against Alphabet is the suspicion that Alphabet continues to favor its own services such as Google Shopping, Google Play and Google Hotels over competing services. 

Apple: Suspicion of restricting user choice

In a further investigation against Apple, the Commission is investigating whether the company is sufficiently fulfilling its obligations (1) to allow end users to easily uninstall software applications on iOS, (2) to easily change the default settings on iOS and (3) to provide users with choice screens that allow them to select an alternative default service such as a browser or search engine. 

Meta: Suspicion of unauthorised accumulation of personal data

Finally, a fifth investigation is directed against Meta. It examines whether the "pay-or-consent" model introduced for users in the EU is compatible with the requirement that gatekeepers must obtain the consent of users if they intend to combine or use their personal data across different core platform services (Article 5 (2) DMA).

What is the risk of non-compliance with the DMA obligations for gatekeepers?

If a gatekeeper breaches its obligations, it could face fines of up to 10% of its global annual group turnover. In the event of repeated breaches, fines of up to 20% of the total global annual turnover are possible (Article 30 DMA). In addition, the EU Commission can impose periodic penalty payments (Article 31 DMA) and, in the case of systematic breaches, also impose behavioral or structural remedies (Article 18 DMA).

Affected companies can take proactive action against gatekeepers

In the event of non-compliance by gatekeepers, there is not only the risk of severe sanctions by the EU Commission. Affected market participants can also actively assert their rights against the gatekeepers - if necessary in court. As we have already reported, in Germany, the 11th amendment to the German Competition Act (ARC) has already introduced regulations in Sections 33 et seq. ARC to support companies in enforcing their DMA-rights in court.  

Affected parties can, for example, assert injunctive reliefs and claims for damages against the gatekeepers. In damages proceedings, national courts are bound by previous final decisions of the EU Commission with regard to the "gatekeeper" status and a breach of DMA obligations (Section 33c ARC). This exempts affected companies from proving a breach of the DMA by a gatekeeper. 

An important source of information for affected market participants will also be the compliance report that every gatekeeper has to submit to the EU Commission since the beginning of March 2024 and which the Commission will publish in a non-confidential version. In this report, companies must set out what measures have been taken to ensure compliance with the obligations under the DMA (Article 11 DMA). 

Finally, consumer organizations also have the option of bringing an action against gatekeepers (Article 42 DMA). In Germany, consumer organizations can sue the gatekeeper for injunctive relief and removal in the event of a breach of the DMA in accordance with the German Act on Injunctive Relief (UKlaG).

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