The European Union has launched a sweeping enforcement action against Apple and Meta, accusing the tech giants of breaching the Digital Markets Act (DMA) with business practices that allegedly restrict competition and harm consumer choice.
Apple has been fined €1.8 billion for preventing app developers from directing users to cheaper alternatives outside its App Store.
Meanwhile, Meta is under scrutiny for its “pay-or-consent” model on Facebook and Instagram, which EU regulators say undermines data protection rules. Both companies must comply within two months or risk additional penalties.
Apple fined €1.8B for App Store restrictions
Apple’s financial penalty stems from what the European Commission described as “technical and commercial restrictions” that discouraged developers from informing users of alternative purchase options outside the iOS App Store.
According to regulators, these actions constitute a clear breach of the DMA, which came into force in May 2023 to address anti-competitive behaviour by so-called gatekeepers — large platforms that act as access points between businesses and users.
The Commission’s investigation revealed that Apple not only hindered app developers from promoting cheaper subscriptions or services outside its ecosystem, but also implemented practices that dissuaded users from exploring third-party options.
Despite Apple introducing changes to its browser settings — a move regulators deemed compliant — it was still charged for restricting sideloading and imposing what’s called the Core Technology Fee on developers using alternative distribution channels.
Meta’s pay-or-consent model flagged
Meta is also under the spotlight for a controversial model rolled out in November 2023. Under this framework, Facebook and Instagram users in the EU must either agree to be tracked for targeted ads or pay a monthly fee for an ad-free experience.
The European Commission argues this model infringes on the DMA by not offering a genuine alternative to data tracking.
Although Meta is in ongoing talks with EU regulators to revise the model, the Commission has insisted the current system fails to respect user consent in line with legal standards.
The regulator said the binary option effectively coerces users into accepting tracking, thereby compromising fair choice and competition.
Meta, which continues to challenge the ruling, stated that it was being unfairly targeted compared to its European and Chinese counterparts.
Separate Apple probe dropped after compliance
Apple managed to avoid further sanctions in a separate investigation focused on browser and search engine choices on iPhones.
The Commission confirmed on Wednesday that changes introduced by Apple — enabling users to easily switch to rival browsers and search engines — were sufficient to comply with the DMA. As a result, that particular inquiry has now been closed.
Nonetheless, Apple remains under pressure due to broader issues with how it manages app distribution. The Commission criticised the company’s conditions for alternative app stores, arguing that they include disincentives for developers and fail to offer a level playing field.
The introduction of the Core Technology Fee was flagged as a significant barrier for developers seeking to distribute apps outside the official App Store.
Meta’s Marketplace no longer a gatekeeper
In a minor reprieve for Meta, the Commission said it would no longer classify Meta’s Marketplace as a gatekeeper service under the DMA.
This decision follows a reported decline in its number of active users, bringing it below the required threshold for such designation.
While this provides limited relief, the company still faces broader challenges in meeting compliance obligations within the digital advertising ecosystem.
Both Apple and Meta have two months to align with the new EU directives or face additional sanctions that could include daily fines of up to 5% of their global revenue.
The EU’s actions mark a significant escalation in regulatory oversight aimed at reining in the market power of Big Tech across Europe.
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