The European Union could fine Mark Zuckerberg’s Meta (Facebook, Instagram) €1 billion or more for violating antitrust rules, in response to President Donald Trump’s sanctions against EU companies.
The European Commission (EC), the EU’s antitrust watchdog, is expected to conclude that Meta does not comply with the Digital Markets Act, sources close to the situation said.
The EU’s Digital Markets Act (DMA) comes into force in 2023 and applies strict competition rules to Meta and six other internet moguls. The regulator’s focus is on data processing and business activity.
According to Post sources, the fines could be in the hundreds of millions of dollars at the minimum and as high as $1 billion after the EC’s decision. The EU investigation into the parent company of Facebook and Instagram is expected to be concluded this week, with the commission’s enforcement measures to be announced immediately, the people said.
According to the sources, EU officials are expected to call on Meta to comply with the rules and inform the company of what changes it needs to make to comply.
In addition, Apple is also in the EU commission’s crosshairs and could be fined this week or next week. Interestingly, earlier this month, Reuters reported that Apple and Meta were likely to get away with “modest fines” for violating the DMA. Theresa Ribera, the EU’s antitrust chief, had previously said that a decision on enforcement actions against both companies would be made in March. Now, that view appears to have changed.
In addition to Meta and Apple, the companies considered “gatekeepers” under the DMA include Google’s Alphabet, Amazon, Booking.com, TikTok’s ByteDance and Microsoft. These are the so-called Big Tech companies.
EU regulators and other supporters say the law prevents tech giants from using anti-competitive behavior, such as abusing their market power, to squeeze out smaller rivals.
The law allows Big Tech companies to be fined up to 10 percent of their global revenue for repeated violations, with the penalty going up to 20 percent of revenue.
The EU launched an investigation into Meta in June last year over its “pay or opt-in” model that restricted customers. In practice, this meant that users either paid to opt out of ads on Instagram and Facebook or were given them without asking. The problem was that those who didn’t pay also agreed to Meta using their data to target ads.
The EU commission said the company had failed to offer a third option. Meta argued that the EU commission had consistently used conditions to comply with the rule that went beyond the law.
In June of last year, Apple became the first company to be charged with violating the DMA, allegedly for preventing rival app developers from easily diverting customers to services outside the App Store. The EU last week again warned Apple that it must open up its iPhone operating system to app developers, just as it has done with Android. The problem with Google’s Alphabet is that it treats its in-house (i.e., its own) services “more favorably.”
Amidst sharp criticism from big tech, the law has increasingly drawn the ire of President Trump, who has vowed to impose retaliatory tariffs to level the playing field. Trump issued a memo last month warning that his administration would consider countermeasures.
President Trump will not allow foreign governments to siphon off America’s tax base for their own benefit, the White House said at the time.
House Judiciary Committee Chairman Jim Jordan has specifically asked EU officials for information on how the bloc plans to enforce the Digital Markets Act. Jordan noted that six of the seven “gatekeepers” covered by the law are American-owned.
“These heavy fines appear to have two purposes: to force businesses to follow European standards and to tax American companies in Europe,” Jordan said in his letter.
