IP Law Daily, TECHNOLOGY/INTERNET NEWS: European Commission fines Apple and Meta €500 million and €200 million respectively, (Apr 23, 2025)

By Martin A. Steinberg, J.D.

Apple and Meta were found to have breached their obligations under the Digital Markets Act by violating their consumer choice obligations.

The European Commission found that Apple breached its anti-steering obligation under the Digital Markets Act (DMA) and Meta breached the DMA obligation to give consumers the choice of a service that uses less of their personal data. The fines imposed considered the gravity and duration of the non-compliance, noting that today's decisions against Apple and Meta were the first non-compliance decisions adopted under the DMA. In March 2024, the Commission opened non-compliance investigations into Apple's rules on steering in the App Store and Meta's “pay or consent model”. In July and August 2024, the Commission informed Apple and Meta of its preliminary view that the companies breached the DMA.

Apple. Under the DMA, app developers distributing their apps via Apple's App Store should be able to inform customers, free of charge, of alternative offers outside the App Store, steer them to those offers, and allow them to make purchases. The Commission found that Apple failed to comply with this obligation. Due to several restrictions Apple imposes, app developers cannot fully benefit from the advantages of alternative distribution channels outside the App Store. Developers wanting to use alternative app distribution channels on iOS are disincentivized, such as by requiring them to opt for business terms that include a new fee (Apple's Core Technology Fee). Apple also introduced overly strict eligibility requirements, hampering developers' ability to distribute their apps through alternative channels.

Similarly, consumers cannot fully benefit from alternative and cheaper offers as Apple prevents app developers from directly informing consumers of such offers. Apple makes it overly burdensome and confusing for end users to install apps when using such alternative app distribution channels. The company has failed to demonstrate that these restrictions are objectively necessary and proportionate.

The Commission has ordered Apple to remove the technical and commercial restrictions on steering and refrain from perpetuating the non-compliant conduct in the future, including adopting conduct with an equivalent object or effect. The fine imposed on Apple took into account the gravity and duration of the non-compliance. As a result of this decision, the Commission closed the investigation on Apple's user choice obligations, partly due to Apple's early and proactive engagement on a compliance solution.

As a result of discussions between the parties, Apple changed its browser choice screen, streamlining the user experience of selecting and setting a new default browser on iPhone. Apple is also making it easier for users to change default settings for calling, messaging, call filtering, keyboards, password managers, and iPhone translation services. A new menu allows users to adjust their default settings in one centralized location, streamlining the customization process. In addition, users can now uninstall several Apple pre-installed apps, such as Safari, a functionality previously unavailable.

Meta. In November 2023, Meta introduced a binary ‘Consent or Pay' advertising model. Under this model, EU users of Facebook and Instagram had a choice between consenting to the combination of personal data for personalized advertising or paying a monthly subscription fee for an ad-free service. Under the DMA, gatekeepers must seek users' consent to combine their personal data across services. Those users who do not consent must have access to a less personalized but equivalent alternative.

The Commission found that this model was not compliant with the DMA because it did not give users the specific choice to opt for a service that uses less of their data but is otherwise equivalent to the ‘personalized ads' service. Meta's model also did not allow users to exercise their right to consent to the combination of their personal data freely.

In November 2024, after numerous exchanges with the Commission, Meta introduced another version of the free personalized ads model, offering a new option that allegedly uses less personal data to display advertisements. The Commission is assessing this option and continues its dialogue with Meta, requesting the company provide evidence of this new ad model's impact in practice. Without prejudicing the ongoing assessment, today's decision finding non-compliance concerns the period during which end users in the EU were only offered the binary ‘Consent or Pay' option between March 2024, when the DMA obligations became legally binding, and November 2024, when Meta's new ads model was introduced.

Facebook Marketplace. The Commission found that Meta's online intermediation service, Facebook Marketplace, should no longer be designated under the DMA. The decision followed a request from Meta on 5 March 2024. Following an assessment of Meta's arguments and as a result of Meta's additional enforcement and continued monitoring measures to counteract the business-to-consumer use of Marketplace, the Commission found that Marketplace had less than 10,000 business users in 2024. Meta no longer meets the relevant threshold, giving rise to a presumption that Marketplace is an essential gateway for business users to reach end users.

Meta’s response. Joel Kaplan, Chief Global Affairs Officer for Meta, stated that the Commission attempts to handicap successful American businesses while allowing Chinese and European companies to operate under different standards. Beyond being about a fine, the Commission is forcing us to change Meta’s business model, effectively imposing a multi-billion-dollar tariff on Meta while requiring it to offer an inferior service. Unfairly restricting personalized advertising, the Commission also hurts European businesses and economies.

Companies: Apple Inc., Meta Platforms, Inc.

News: TechnologyInternet