Investing.com - Apple and Facebook-owner Meta Platforms (NASDAQ:META) have been fined hundreds of millions of dollars by the European Union for not following the bloc’s rules governing tech companies.
The iPhone-maker faces a penalty of 500 million euros, or about $570 million, while Meta was fined 200 million euros, according to the European Commission, the executive arm of the EU.
In a statement, the Commission said it found that Apple (NASDAQ:AAPL) failed to comply with a rule that allows app developers on its App Store to inform customers, "free of charge, of alternative offers outside the App Store, steer them to those offers and allow them to make purchases."
"Due to a number of restrictions imposed by Apple, app developers cannot fully benefit from the advantages of alternative distribution channels outside the App Store," the Commission added. "Similarly, consumers cannot fully benefit from alternative and cheaper offers as Apple prevents app developers from directly informing consumers of such offers."
Meanwhile, the Commission said Meta’s "Consent or Pay" advertising model, which lets EU users of Facebook and Instagram choose between consenting to combining their personal data between the platforms for personalized marketing or paying a monthly subscription for an ad-free service, was also not compliant with the bloc’s regulations.
The Commission argued that the model did not give users the "required specific choice to opt for a service that uses less of their personal data but is otherwise equivalent to the ‘personalised ads’ service." Meta also did not give users the opportunity to "exercise their right to freely consent to the combination of their personal data," the Commission said.
Cease-and-desist orders were issued against both of the companies.
Both of the firms were found to be in breach of the EU’s Digital Markets Act, a 2022 law which aims to crimp the power of tech giants and ease the competitive pressures on their smaller rivals. Although the possible fines can amount to up to 10% of a group’s worldwide annual revenue, the penalties imposed on Apple and Meta were well below this level.
Apple vowed to appeal the decision, adding that it had been "unfairly" targeted by the Commission. The decisions are bad for user privacy and security and force the company to give away technology for free, it said.
Meta argued that the fines amounted to a "geopolitical instrument" against American companies, suggesting that a decision last week to delay the decisions may have been linked to ongoing trade talks between the U.S. and EU.
The Wall Street Journal has reported that the announcement had initially been slated for April 15, shortly after EU Trade Commissioner Maros Sefcovic spoke with U.S. officials and prior to a meeting between President Donald Trump and Italian Prime Minister Giorgia Meloni.