Tag Archives: European Commission

Commission Fines Meta €797.72 Million Over Abusive Practices

Meta

The European Commission has fined Meta €797.72 million for breaching EU antitrust rules by tying its online classified ads service Facebook Marketplace to its personal social network Facebook and by imposing unfair trading conditions on other online classified ads service providers.

The Commission’s investigation found that Meta is dominant in the market for personal social networks, which is at least European Economic Area (‘EEA’) wide, as well as in the national markets for online display advertising on social media.

In particular, the Commission found that Meta abused its dominant positions in breach of Article 102 of the Treaty on the Functioning of the European Union (‘TFEU’) by:

Tying its online classified ads service Facebook Marketplace to its personal network Facebook. This means that all Facebook users automatically have access to get regularly exposed to Facebook Marketplace whether they want it or not. 

The Commission found that competitors of Facebook Marketplace may be foreclosed as the tie gives Facebook Marketplace may be foreclosed as the tie gives Facebook Marketplace a substantial distribution advantage which competitors cannot match.

Unilaterally imposing unfair trading conditions on other online classified ads services providers who advertise on Meta’s platforms, in particular on it’s very popular social networks Facebook and Instagram. This allows Meta to use ads-related data generated by other advertisers for the sole benefit of Facebook Marketplace.

The Commission has ordered Meta to bring the conduit effectively to an end, and to refrain from repeating the infringement or from adopting practices with an equivalent object or effect in the future.

Meta posted: Our response to the European Commission’s Decision on Facebook Marketplace

Today, the European Commission announced a decision claiming that Facebook Marketplace has hindered completion for online marketplaces in Europe. This decision ignores the realities of the thriving European market for online classified listing services and shields large incumbent companies from a new entrant, Facebook Marketplace, that meets consumer demand in innovative and convenient new ways. We will appeal this decision to ensure that consumers are well served in the EU.

Engadget reported: The executive arm of the European Union isn’t shying away from slapping major tech companies with hefty fines. The European Commission has fined Meta €797.72 ($842 million) for violating antitrust regulations.

The EC found that third-party classified ads serves that advertised on the likes of Facebook and Instagram were subject to unfair trading conditions. “This allows Meta to use ads-related data generated by other advertisers for the sole benefit of Facebook Marketplace,” regulators contended.

In my opinion, it appears that Meta is going to have to face the European Commission’s decision on the €797.72 million.

Apple Reaches Deal With EU Regulators To Open Up Mobile Payments

Apple,

EU antitrust regulators on Thursday accepted commitments from Apple to allow access to its tap-and-go payments technology to rivals, bringing an end to a four-year investigation, CNBC reported.

“The commission has decided accept commitments offered by Apple. These commitments address our preliminary concerns that Apple may illegally have restricted competition when it comes to mobile wallets and iPhones,” EU antitrust chief Margrethe Vestager said during a news conference.

The EU formally launched an investigation relating to Apple Pay in 2020. The probe looked at the terms and conditions Apple sets for integrating Apple Pay in apps and websites, as well as concerns around the tap-and-go technology and alleged refusals of accessing Apple Pay.

In 2022 the European Commission found that Apple Pay could restrict competition as it was the only option for iPhone users. Apple has since suggested several commitments to address the concerns and in January it offered to give its rivals access to contactless payment and mobile wallet technology.

“The commitments bring important changes to how Apple operates in Europe add to the benefit of competitors and customers,” Vestager said.

The iPhone maker now has until July 25 to implement the commitments, Vestager said. All developers will then be able to offer mobile wallets for iPhones with the tap-and-go technology, she explained. The commitments are set to remain in effect for 10 years.

The European Commission posted: Commission accepts commitments by Apple opening access to ‘tap and go’ technology on iPhones

…In its investigation, the Commission preliminary concluded that Apple abused its dominant position by refusing to supply the NFC input on iOS to competing mobile wallet developers, while reserving such access only to Apple Pay.

The Commission’s preliminary view is that Apple’s refusal excluded Apple Pay’s rivals from the market and led to less innovation an choice for iPhone mobile wallets users.

Such behavior may breach Article 102 of the Treaty on the Functioning of the European Union (TFEU) which prohibits the abuse of a dominant position.

The Commission concluded that Apple’s final commitments would address its competition concerns over Apple’s restriction of third-party mobile wallet developers’ access to NFC payments in stores for EEA iOS users. It therefore decided to make them legally binding on Apple.

The commitments will remain in force for ten years and apply throughout the EEA. Their implementation will be monitored by a monitoring trustee appointed by Apple who will report to the Commission for the same time period.

ArsTechnica reported: In two weeks, iPhone users in the European Union will be able to use any mobile wallet they like to complete “tap and go” payments with the ease of using Apple Pay.

In a press release, the EU’s executive vice president, Margrethe Vestager, said that Apple’s commitments in the settlement address the commission’s “preliminary concerns that Apple may have illegally restricted competition for mobile wallets on iPhones.”

Arguably, providing outside developers access to NFC functionality on its devices is the biggest change. Rather than allowing developers to access this functionality through Apple’s hardware, Apple has borrowed a solution prevalent in the Android ecosystem, Vestager said, granting access through a software solution called “Host Card Emulation mode.”

In my opinion, Apple is going to have to work hard to keep its commitments to the European Commission and make changes to how it handles “tap and go”. Apple’s deadline is July 25.

Brussels Accuses Apple Of Breaking UE ‘Gatekeeper’ Rules

Apple,

Brussels has accused Apple of stifling competition on its App Store, marking the first time EU regulators have brought charges against a Big Tech group under new digital rules, Financial Times reported.

The European Commission has been gearing up for years to unleash the full authority of its new Digital Markets Act against Big Tech. The landmark rules were designed to help start-ups by forcing powerful “online gatekeepers” — most of whom are US companies — to open up their businesses to competition.

In preliminary findings issued on Monday, regulators in Brussels said they were concerned about restrictions Apple is imposing on developers’ ability to “freely steer their customers” by directing them to promotions outside the App Store.

If found guilty, the iPhone maker faces a penalty of up to 10 per cent of its global annual revenue, meaning any fine could run into tens of billions of dollars. The fines can rise to 20 per cent in the event the offense is repeated, the EU said. Apple said it was “confident” in its compliance.

European Commission posted a press release titled: “Commission sends preliminary findings to Apple and opens additional non-compliance investigation against Apple under the Digital Markets Act”

Today, the European Commission has informed Apple of its preliminary view that its App Store rules are in breach of the Digital Markets Act (DMA), as they prevent app developers from freely steering consumers to alternative channels for offers and content…

Apple currently has three sets of business terms governing its relationship with app developers, including the App Store’s steering rules. The Commission finds that:

* None of these businesses terms allow developers to freely steer their customers. For example, developers cannot provide pricing information within the app or communicate in any other way with their customers to promote offers available on alternative distribution channels.

* Under most of the business terms available to app developers, Apple allows steering only through “link-outs”, i.e., app developers can include a link in their app that redirects the customer to a web page where the customer can conclude a contract. The link-out process is subject to several restrictions imposed by Apple that prevent app developers from communicating, promoting offers, and concluding contracts through the distribution channel of their choice.

* Whilst Apple can receive a fee for facilitating via the AppStore, the initial acquisition of a new customer by developers, the fees charged by Apple go beyond what is strictly necessary for such renumeration. For example, Apple charges developers a fee for every purchase of digital goods or services a user makes within seven days after a link-out from the app.

The Guardian reported Apple has been found to be in breach of sweeping new EU laws designed to allow smaller companies to compete and allows consumers to find cheaper and alternative apps in terms of tech business’s app store.

The European Commission, which also acts as the EU antitrust and technology regulator, said it had sent its preliminary findings to Apple after an investigation in March.

The company has 12 months to comply before it face fines of up to 10% of its global revenues but the EU hopes ongoing dialogue will lead to compliance rather than sanctions.

In my opinion, it sounds like Apple decided to do what it does, regardless of how that will affect their business. What works as a business model in the U.S. is clearly not acceptable by the European Commission.

EU Commission Fines Apple €1.8 Billion Over Abusive App Store Rules

Apple,

The European Commission has fined Apple over €1.8 billion for abusing its dominant position on the market for the distribution of music streaming apps to iPhone and iPad users (‘iOS users’) through its App Store. In particular, the Commission found that Apple applied restrictions on app developers preventing them form informing iOS users about alternative and cheaper music subscription services available outside the app (‘anti-steering provisions’). This is illegal under EU antitrust rules.

The infringement

Apple is currently the sole provider of an App Store where developers can distribute their apps to iOS users throughout the European Economic Area (‘EEA’). Apple controls every aspect of the iOS user experience and sets the terms and conditions that developers need to abide by to be present on the App Store and be able to reach iOS users in the EEA.

The Commission’s investigation found that Apple bans music streaming app developers from fully informing iOS users about alternative and cheaper music subscription services available outside of the app and from providing any instructions about how to subscribe to such offers. In particular, the anti-steering provisions ban app developers from:

Informing iOS users within their apps about the prices of subscription offers available on the internet outside of the app.

Informing iOS users within their apps about the price differences between in-app subscriptions sold through Apple’s in-app purchase mechanism and those available elsewhere.

Including links in their apps leading iOS users to the app developer’s website on which alternative subscriptions can be bought. App developers were also prevented from contacting their newly acquired users, for instance by email, to inform them about alternative pricing options after they set up an account.

Reuters reported Brussels on Monday fined Apple 1.84 billion euros ($2 billion) for thwarting competition from music streaming rivals via on its App Store, the iPhone maker’s first ever penalty for breaching EU rules.

A basic penalty of 40 million euros was inflated by a huge lump sum included as a deterrent – a first for the European Union’s antitrust authorities. 

According to Reuters, Apple said it would appeal the decision. A ruling at the Luxembourg-based General Court, Europe’s second-highest, is likely to take several years. Until then, Apple will have to pay the fine and comply with the EU order.

CNBC reported the European Commission, the European Union’s executive arm, on Monday hit Apple with a 1.8 billion euro ($1.95 billion) antitrust fine for abusing its dominant position in the market for the distribution of music streaming apps.

Apple also banned developers of music streaming apps from providing any instructions about how users could subscribe to these cheaper offers, the commission alleged.

In my opinion, it would be smarter for Apple to pay the fine and move on, rather than trying to fight the European Commission.

EU To Fine Apple €500 Million Over Music Streaming

Apple,

Brussels will hit tech giant Apple with a €500 million fine for allegedly breaking EU law over access to its music streaming services, the Financial Times reported Sunday, according to Politico.

The fine would be the EU’s first ever against Apple and is expected to be announced early next month, according to the FT report. It is the result of a European Commission antitrust probe into whether Apple’s “anti-steering” requirements breach the bloc’s abuse of dominance rules, harming music consumers “who may end up paying more” for apps.

The probe is investigating contractual restrictions that Apple imposed on app developers that prevent them from informing iPhone and iPad users of cheaper music subscription options. It was launched after Spotify made a formal complaint to regulators in 2019.

Apple Insider reported that Apple may be the target of a 500 million euro ($538 million) fine from the European Commission, with the regulator expected to impose the charge following its competition probe into how it treats Apple Music’s competitors.

The European Commission has been investigating whether Apple broke antitrust laws following a 2019 complaint from Spotify, which resulted in a 2020 probe launch. Almost four years later, the European Commission is allegedly preparing to hand out punishments.

According to five people with knowledge of the investigation, the Financial Times reports that the Commission is expected to announce a fine against Apple early in March. The fine, thought to be in the ballpark of 500 million euro, will supposedly be accompanied by a ruling that Apple broke EU laws with its App store anti-steering rules.

The Verge reported that Apple will reportedly have to pay around €500 (around $539 million USD) in the EU for stifling competition against Apple Music on the iPhone. Financial Times reported this morning that the fine comes after regulators in Brussels, Belgium investigated a Spotify complaint that Apple prevented apps from telling users about cheaper alternatives to Apple’s music service.

According to The Verge, the issue comes down to Apple’s efforts to keep apps and users corralled inside its App Store payments system. Spotify complained in 2019 that Apple’s policies muted competition. The EU whittled its objections down to oppose Apple’s refusal to let developers even link out to their own subscription sign-ups within their apps – a policy that Apple changed in 2022 following regulatory pressure in Japan.

Apple representative Emma Wilson told The Verge via email that the company is “not commenting on speculation” and referred us to previous statements made by another Apple spokesperson, Hannah Smith, who said in February last year that the company hoped the Commission would stop pursuing the case, which Smith said “has no merit.” European Commission spokesperson Lea Zuber declined to comment.

In my opinion, this is a situation that goes back several years, and appears to be slowly taken up by the EU. And now, it sounds like the EU is intending to impose a fine on Apple.

European Commission Closes Market Investigation on Microsoft’s and Apple’s Services

Apple, ,

The European Commission adopted decisions closing four market investigations that were launched on 5 September 2023 under the Digital Markets Act (DMA), finding that Apple and Microsoft should not be designated as gatekeepers for the following core platform services: Apple’s messaging service iMessage, Microsoft’s online search engine Bing, web browser Edge, and online advertising service Microsoft Advertising.

The decisions concluded the Commission’s investigations opened following the notification by Apple and Microsoft in July 2023 of the core platform services that met the quantitative thresholds. Among these notified services were also the four services concerned by today’s decision. Together with the notifications, Apple and Microsoft also submitted so-called “rebuttal” arguments, explaining why despite meeting the qualitative thresholds, these four core platform services should not, in their view, qualify as gateways.

In its decision of 5 September 2023, the Commission considered the rebuttal requests made by Apple and Microsoft deserved an in-depth analysis. Following a thorough assessment of all arguments, taking into account input by relevant stakeholders, and after hearing the Digital Markets Advisory Committee, the Commission found that iMessage, Bing, Edge, and Microsoft Advertising do not qualify as gatekeeper services.

The Commission will continue to monitor the developments on the market with respect to these services, should any substantial changes arise. The decisions do not affect in any way the designation of Apple and Microsoft as gatekeepers on 5 September 2023 as regards to their other platform services.

Engadget reported Apple’s blue bubbles are safe from interlopers for now. Following an investigation, European Union officials have determined that iMessage — along with Microsoft’s Bing, Edge, and Microsoft Advertising – don’t hold a dominant enough position in their respective markets to be subject to stricter regulation under the Digital Markets Act. Were iMessage to be brought under the DMA rules, Apple would need to make it interoperable with other messaging services.

The three Microsoft products and iMessage meet the qualitative thresholds for regulation under DMA. Apple and Microsoft easily clear the law’s revenue and market capitalization thresholds, while the four platform services in question have at least 45 million monthly active users in EU and north of 10,000 yearly active business users in the bloc.

While the EU won’t force iMessage to play nicely with other messaging services, Apple has creaked open the door to interoperability. The company has pledged to support the RCS messaging standard starting this year, meaning that messaging between iMessage and Android should be more secure and feature-rich. RCS texts will still be in green bubbles, however, rather than the blue of iMessage missives.

Overall, it appears that the EU’s decision that Apple and Microsoft are not gatekeepers is a good thing. It likely means that the EU is not going to enact harsh penalties on either company (at least, not right away).

Adobe And Figma Mutually Agree To Terminate Merger Agreement

Adobe, , ,

Today, Adobe and Figma announced that they have entered into a mutual agreement to terminate their previously announced merger agreement, originally announced on September 15, 2022, under which Adobe would have acquired Figma for a mix of cash and stock consideration, Business Wire reported.

Although both companies continue to believe in the merits and procompetitive benefits of the combination, Adobe and Figma mutually agreed to terminate the transaction based on a joint assessment that there is no clear path to receive necessary regulatory approvals from the European Commission and the UK Competition and Markets Authority.

“Adobe and Figma strongly disagree with recent regulatory findings, but we believe it is in our respective best interests to move forward independently,” said Shantanu Narayen, chair and CEO, Adobe. “While Adobe and Figma shared a vision to jointly redefine the future of creativity and productivity, we continue to be well positioned to capitalize on our massive market opportunity to change the world through personalized digital experiences.”

“Figma has built an incredible product design platform, and I am confident in their continued innovation and growth after spending more than year with their team and community,” said David Wadhwani, president, Digital Media Business, Adobe. “While we’re disappointed in the outcome, I am deeply grateful to everyone who has contributed to this effort and excited to find other ways to innovate on behalf of our respective communities with Adobe.”

The companies have signed a termination agreement that resolves all outstanding matters from the transaction, including Adobe paying Figma the previously agreed upon termination fee.

The Wall Street Journal reported Adobe has called off its planned $20 billion acquisition of the collaboration-software company Figma, weeks after a U.K. regulator warned that the deal would likely harm innovation.

Adobe and Figma said Monday morning that they have mutually agreed to terminate the cash-and-stock transaction because they couldn’t see a clear path to receiving regulatory approval from the European Commission and the U.K. Competition and Markets Authority.

The deal is the latest to run into a tighter global regulatory environment as some regulators and policy markets have been giving technology acquisitions more scrutiny than they have in the past.

CNBC reported that Adobe shares rose around 0.6% in Monday morning trading.

According to CNBC, Antitrust regulators have increasingly scrutinized numerous tech deals big and small. In May, after the U.K’s competition watchdog cited potentially anticompetitive effects, Meta sold Giphy to photo marketplace Shutterstock for $53 million, three years after it first acquired it. The CMA has also been reviewing Microsoft’s investment in Open AI.

Considering all of this, it appears that companies that want to do business in the U.K. will have some difficulties achieving that goal. I wonder if this sort of situation will break up other existing mergers.