The EU Busts Out the Kid Gloves for the First DMA Fines
Kim Mackrael & Sam Schechner
With Team Trump now back at home after a quick trip to Europe to discuss trade deals,1 the EC has come back out of hiding:
The European Union fined Apple and Meta Platforms hundreds of millions of dollars and ordered the companies to comply with the bloc’s tech rules, a move that risks ratcheting up tensions with the Trump administration as EU officials pursue trade talks.
The European Commission, the EU’s executive body, on Wednesday slapped Apple with a fine of 500 million euros, equivalent to about $570 million. It fined Meta €200 million.
Oddly, the WSJ didn't want to do the Meta math for you – this is breaking news – so I will: €200 million is about $230M. And that's notable because of what it's not. Specifically, $230M is not $16.45B. And $570M is not $39.1B. Those latter numbers would have been 10% of Meta's and Apple's annual worldwide revenue, respectively. And that's the amount the EC says that it could have charged these companies for failing to comply with the DMA.
In other words, the EC came out swinging with kid gloves.
This is hardly surprising. With the turnover in leadership amongst the EC late last year, it seemed like the group may start to take a different approach to regulating Big Tech. While they still clearly aimed to follow the mandate to go after Apple, Meta, and the like, they also seemed to be taking into account the damning report from Mario Draghi, the former president of the European Central Bank (and former Prime Minister of Italy), which took the EU to task over their approach to competition. They were finally starting to read the room, meaning, the world.
And then Donald Trump was elected. Again. And with that came the promise that if anyone was going to regulate Big Tech, it would be America, and not our neighbors to the east. And then came the tariffs. And so again, when Trump was in town last week, reports stated that the EU decided to delay announcing the fine on Apple and Meta – presumably (and not coincidentally) until he was gone again and couldn't confront them in person about it. And here we are.
But again, this is kids glove stuff. Both Meta and Apple are saying they'll appeal, because of course they will since the fine was not $0 and because the President now seemingly has their backs. The President will want them to appeal. But this is essentially pocket change for both companies.
Of course, the fines can keep coming. And both have a mere 60 days to get into compliance with the rules which range from vague (with Apple) to borderline insulting (with Meta):
The commission also issued cease-and-desist orders against both companies, which target business practices that are an important part of their revenue streams, and could have a bigger impact than the fines.
It ordered Apple to remove what it said were technical and commercial restrictions on app developers’ ability to inform users about cheaper and alternative ways to buy digital products outside the company’s App Store.
The commission also said it is still evaluating whether an option Meta has for several months given European users to see “less-personalized ads” on Instagram and Facebook without paying a subscription fee complies with the cease-and-desist order—raising the specter of further changes. The EU fine covers a period last year when Meta required European users to agree to seeing personalized ads on those apps, or pay for an ad-free subscription.
Fines aside, this will be the real stand-off. Are Apple and Meta going to tweak their services in the next couple of months or risk another fine? Does the EC dare fine again or even escalate those fines to be more meaningful? Does Trump combat this move with new tariffs on the EU? The EC may have just brought those kid gloves into the ring with a sleuth of grizzly bears.2
M.G. Siegler
M.G. Siegler
M.G. Siegler
1 And yes, per the internet memes this week, to meet with the Pope in what was sadly his last official visit.
2 Yes, that's the right word, look it up!