The EU has launched a groundbreaking probe into tech giants including Apple, Google parent Alphabet and Facebook parent Meta for alleged non-compliance with its newly enforced Digital Markets Act (DMA).

The investigations mark the first use of the landmark legislation designed to curb the market power of major online platforms, often called digital gatekeepers.

The European Commission announced on Monday that it would investigate whether Apple and Alphabet are unfairly favouring their app stores and whether Meta is improperly using personal data for advertising purposes. These probes directly result from the DMA, which seeks to ensure open and competitive European digital markets.

Should the companies be found guilty of breaching the DMA, they could face substantial penalties, potentially amounting to as much as 10% of their global turnover. This move underscores the EU’s commitment to enforcing new regulations to prevent big tech companies from exploiting their market position to the detriment of competitors and consumers.

Margrethe Vestager, executive vice-president of competition policy, expressed concerns that the “pay or consent model” used by Meta, Apple and Alphabet might not fully comply with the DMA’s requirements. The investigations, she said, aimed to ensure that the companies aligned with the DMA to foster open and contestable digital markets in Europe.

According to Alex Haffner, a competition partner at Fladgate, the European Commission’s swift action is unprecedented, signifying the seriousness with which the EU approaches the enforcement of the new regime less than a month after DMA implementation.

Konstantina Bania of Geradin Partners said the announcement debunked the myth that the Commission would stay idle post-designation because of insufficient resources. She added: “Companies that fall in scope must either offer a DMA-compliant solution or are bound to engage in investigations with significant implications for their business operations regarding fines, reputational damage and future commercial strategies.”

Becket McGrath of competition law boutique Euclid Law called the litigation “a key moment for the DMA”.

He said: “While the new law was initially promoted as largely ‘self-executing’, based on the premise that, by providing gatekeepers with a detailed ‘shopping list’ of prohibited behaviour, they would simply be able to get on with the job of complying without any need for the sort of long and expensive investigation we are used to seeing under Article 102 [of the Treaty of European Union].”

McGrath said the move to rigid ‘bright line’ prohibitions was a conscious and explicit shift from the more nuanced effects of an economics-led world of abuse of dominance.

Noting that “reality was bound to be more complicated”, not least due to the platforms’ financial incentives to test the boundaries of compliance, he said the Commission had led a carefully choreographed engagement process with stakeholders.

Nonetheless, there were inevitably gaps between what was presented to the Commission as compliance and what the Commission and third parties expected to see. 

McGrath said it was “essential for the regime’s credibility that the Commission responded quickly to the cases of non-compliance identified since the DMA came into force fully in March”.

In response to the EU’s probes, the implicated companies, which also included online retailer Amazon, claimed commitment to compliance and constructive engagement with the Commission. Meta defended its subscription model as an established business model across various industries. Google’s Oliver Bethell stated that significant changes had been made to comply with the DMA in Europe.

McGrath noted: “Inevitably, the affected gatekeepers will push back, arguing that the changes they have implemented in the EU do amount to compliance with their new obligations. Whether particular platforms’ arguments have merit or are designed to play for time and maintain lucrative revenue streams for a bit longer should become clear with time.”

Such actions presage ongoing private enforcement of claims against big tech companies alongside parallel EU regulatory action, such as Rachael Kent’s £1.7 billion legal claim against Apple in the UK, which accuses the company of using its app store dominance to overcharge users.

The case, scheduled for court in January 2025, could feature many of the same arguments that the EU’s probe can be expected to raise. Kent said: “Apple’s approach to Europe’s DMA is disappointing and cynical, and the EU is right to take this action.”

“We are at a pivotal moment for digital market regulation. Apple can expect a similar approach when the UK’s digital markets legislation comes into law shortly,” adding that it could not be trusted to prioritise consumer interests or promote open competition.