★ European Commission Opens DMA Non-Compliance Investigations Against Google, Apple, and Meta
You could have set your watch by this announcement dropping the week after the EC held compliance “workshops”.
European Commission press release today:
Today, the Commission has opened non-compliance investigations
under the Digital Markets Act (DMA) into Alphabet’s rules on
steering in Google Play and self-preferencing on Google Search,
Apple’s rules on steering in the App Store and the choice screen
for Safari and Meta’s “pay or consent model”.
The Commission suspects that the measures put in place by these
gatekeepers fall short of effective compliance of their
obligations under the DMA.
You could have set your watch by this announcement dropping the week after the EC held compliance “workshops”. There was no way any of these companies weren’t going to be “investigated” and I doubt there’s any way they won’t eventually get fined. Whether any of them will ever need to pay those fines, that I wouldn’t bet on.
Alphabet’s and Apple’s steering rules
The Commission has opened proceedings to assess whether the
measures implemented by Alphabet and Apple in relation to their
obligations pertaining to app stores are in breach of the DMA.
Article 5(4) of the DMA requires gatekeepers to allow app
developers to “steer” consumers to offers outside the gatekeepers’
app stores, free of charge.
The Commission is concerned that Alphabet’s and Apple’s measures
may not be fully compliant as they impose various restrictions and
limitations. These constrain, among other things, developers’
ability to freely communicate and promote offers and directly
conclude contracts, including by imposing various charges.
The EC is edging closer and closer to saying that successful platforms have no right to monetize their IP on those platforms. That’s exactly what a lot of anti-capitalist critics of these companies have been rooting for, but it would be a radical step.
The Commission has opened proceedings against Alphabet, to
determine whether Alphabet’s display of Google search results may
lead to self-preferencing in relation to Google’s vertical search
services (e.g., Google Shopping; Google Flights; Google Hotels)
over similar rival services.
The Commission is concerned that Alphabet’s measures implemented
to comply with the DMA may not ensure that third-party services
featuring on Google’s search results page are treated in a fair
and non-discriminatory manner in comparison with Alphabet’s own
services, as required by Article 6(5) of the DMA.
Google is already sacrificing results quality, and promoting results from some low-quality comparison sites in the name of compliance. And I don’t even know why this announcement from the EC mentions Google Flights, given that Google has removed Google Flights results from web search results in the EU.
Apple’s compliance with user choice obligations
The Commission has opened proceedings against Apple regarding
their measures to comply with obligations to (i) enable end users
to easily uninstall any software applications on iOS, (ii) easily
change default settings on iOS and (iii) prompt users with choice
screens which must effectively and easily allow them to select an
alternative default service, such as a browser or search engine on
their iPhones.
Apple’s idea is that out of the box, an iPhone presents a complete experience. This keeps coming up, but it’s worth reiterating that there were no third-party apps at all for iPhone for the first year. “A widescreen iPod with touch controls; a revolutionary mobile phone; and a breakthrough Internet communications device.” Music, video, web browsing, email, maps, text messaging, contacts, calendar, and more. These apps aren’t just developed in vacuums and bundled together on a device. On iOS these apps are designed to work together, integrated into a holistic experience. You can — and zillions of iPhone owners do — choose to use alternative apps, but the core apps in iOS are not, as the EU would suggest, a collection of shovelware.
But most of the built-in apps in iOS can be removed from your iPhone the exact same way you delete apps from the App Store. There’s a handful that can’t, among them: Settings, Camera, Photos, App Store, Phone, Messages, and Safari. You can remove those apps from your Home Screen, but they remain in your App Library. If the EC is really going to investigate Apple over removing default apps, I presume they’re thinking that Safari, in particular, needs to be deletable, because making it un-deletable is a form of preferencing? It’s all guess work. I further suppose they might want the App Store app to be deletable, but that’s a problem because it’s through the App Store that a user can re-install built-in apps they’ve previously deleted.
The Commission is concerned that Apple’s measures, including the
design of the web browser choice screen, may be preventing users
from truly exercising their choice of services within the Apple
ecosystem, in contravention of Article 6(3) of the DMA.
Here’s article 6(3) of the DMA, in its entirety:
The gatekeeper shall allow and technically enable end users to
easily un-install any software applications on the operating
system of the gatekeeper, without prejudice to the possibility for
that gatekeeper to restrict such un-installation in relation to
software applications that are essential for the functioning of
the operating system or of the device and which cannot technically
be offered on a standalone basis by third parties.
The gatekeeper shall allow and technically enable end users to
easily change default settings on the operating system, virtual
assistant and web browser of the gatekeeper that direct or steer
end users to products or services provided by the gatekeeper. That
includes prompting end users, at the moment of the end users’
first use of an online search engine, virtual assistant or web
browser of the gatekeeper listed in the designation decision
pursuant to Article 3(9), to choose, from a list of the main
available service providers, the online search engine, virtual
assistant or web browser to which the operating system of the
gatekeeper directs or steers users by default, and the online
search engine to which the virtual assistant and the web browser
of the gatekeeper directs or steers users by default.
How this browser choice screen is non-compliant with the above article, I don’t know. And even in the announcement of their investigation, the EC doesn’t say. My best guess, having read Steven Troughton-Smith’s Whisper-generated transcript of last week’s Apple compliance “workshop”, is that the EC’s problem with Apple’s current browser choice screen is that the list of included web browsers in each EU member state is determined by which web browsers are most popular in each country — which in turn means the only browsers included are those which are already in Apple’s App Store. There’s no mechanism for a new browser that was never in the App Store to be included in the choice screen until a year after it becomes popular enough — via sideloading or distribution through alternative app marketplaces — to make the list. But DMA article 6(3) doesn’t actually say that. It just says the choice screens must include “a list of the main available service providers” — which is exactly what the iOS 17.4 browser choice screen does.
I’ll bet you, like me, took note of article 6(3)’s clauses regarding search engines and virtual assistants. Google Search is a designated “core platform service” and so Google, the gatekeeper that owns it, is obligated to include a choice screen for web search in Android. Apple is obligated to offer a choice screen for browsers, because Safari is a designated core platform service, but not for search, because Google Search is Google’s service, not Apple’s. But as far as I can see, there are no virtual assistants, on any gatekeeper’s platform, that have been designated core platform services, and so I don’t think either Google or Apple is obligated to provide a choice screen for them.
Back to today’s press release from the EC:
Meta’s “pay or consent” model
Finally, the Commission has opened proceedings against Meta to
investigate whether the recently introduced “pay or consent” model
for users in the EU complies with Article 5(2) of the DMA which
requires gatekeepers to obtain consent from users when they intend
to combine or cross-use their personal data across different core
platform services.
The Commission is concerned that the binary choice imposed by
Meta’s “pay or consent” model may not provide a real alternative
in case users do not consent, thereby not achieving the objective
of preventing the accumulation of personal data by gatekeepers.
I wrote about this last week — this is the argument that it’s insufficient for Meta to offer a fair price for a no-targeted-ads experience because the overwhelming majority of people will choose to use Meta’s platforms free-of-charge with targeted ads rather than pay. Nothing, seemingly, will do short of Meta offering its platforms both without charge and without targeted ads, even though non-targeted ads would, at best, generate only pennies on the dollar euro. Not only is the EC signaling that Meta isn’t allowed to set its own price for its own services — they’re seemingly arguing that Meta is obligated to provide its platforms effectively free-of-charge. That’s a radically anti-business stance for an ostensibly capitalist government body to take.