European Union Is Probing Meta, Alphabet, and Apple over Violations
Three tech stocks could be in danger, as a new probe from the European Union is looking into violations of anti-steering rules and “pay or consent” practices.
If the probe discovers that laws were broken, the tech giants may have to pay fines and change the way they do business. In the case of Alphabet and Apple, the investigation is trying to determine if they broke anti-steering laws, which prohibit search engines from blocking cheaper options for consumers to consider. This falls under the Digital Markets Act, which is a relatively new law.
The European Commission said they were investigating whether Apple is steering customers in the App store and what kind of choices it is giving users on the Safari screen. They are also looking into the Meta (Facebook) “pay or consent model”, which could be a violation of the act as well.
Anti-steering rules are the focus of the first probe, which is looking specifically at Apple and Alphabet (Google). The DMA says that tech firms are not permitted to keep cheaper options from users and are not allowed to steer them away from products that the firm did not produce themselves.
Tech Companies in Trouble
How Alphabet and Apple have operated their app stores and search engines seems to be in violation of the DMA rules, according to Margrethe Vestager, the EU’s competition chief. This was detailed in a conference Monday and calls out these companies for charging fees while limiting steering.
The EU charged Apple 1.8 billion euros when the European Commission determined that Apple was preventing its users from learning about other, less expensive music subscription services that were not part of its app.
The further probe is looking into claims that Apple is breaking DMA regulations by making it difficult to change default settings or uninstall apps, and whether those restrictions keep users from switching away from default services to use other competing services.
If any changes have to be made to the way these online services operate, it could negatively affect these companies’ stocks.
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