EU challenges Apple, Microsoft in new push to rein in big tech dominance

Microsoft Corp. and Apple Inc. face fresh investigations from European Union regulators as part of the bloc’s landmark digital markets clampdown, which could end up forcing significant changes in how the firms do business in the region.

The Apple Inc. logo is seen in the lobby of New York City's flagship Apple store January 18, 2011 (REUTERS)

Microsoft Corp. and Apple Inc. face fresh investigations from European Union regulators as part of the bloc's landmark digital markets clampdown, which could end up forcing significant changes in how the firms do business in the region.

The likes of Alphabet Inc.'s Google Search, Apple's App Store and Amazon.com Inc.'s marketplace are among a list of 22 services that fall under the EU's Digital Markets Act, revealed on Wednesday. Now companies including Bytedance Ltd.'s TikTok and Meta Platforms Inc.'s Facebook have six months to fall in line with the new rules or challenge them in the EU court.

However, the European Commission, the bloc's executive arm, said it needed more time to investigate whether Microsoft's Bing, Edge and Advertising services and Apple's iMessage should be exempt from the new rules. The probe will not result in a fine.

For its part, Microsoft argues that Bing is too small a competitor to Google so should be exempt, while Apple says it doesn't have the data available to calculate the number of iMessage users.

The commission has also opened a probe to examine whether Apple's iPad operating system should be included in the regulation.

The new rules — which come into force in March — will impose a rigid regime on firms whose practices have previously resulted in billions of euros in fines and tax orders from the watchdog.

It will be illegal for certain platforms to favor their own services over those of rivals. They'll be barred from combining personal data across their different services, prohibited from using data they collect from third-party merchants to compete against them, and will have to allow users to download apps from rival platforms.

“We remain very concerned about the privacy and data security risks the DMA poses for our users,” Apple said.

“We're extremely disappointed that no market investigation was conducted prior to this decision and are evaluating our next steps,” a TikTok spokesperson said in an email.

The new obligations could result in iPhone users being able to download apps from rival app stores, Meta being barred from combining user data between Facebook and Instagram without obtaining permission, and see Google prohibited from favoring its own search verticals — like Shopping — in its general search results.

“We are finally reining in the economic power of six gatekeepers, giving more choice to consumers and creating new opportunities for smaller innovative tech companies,” said Thierry Breton, the EU's internal market commissioner.

Margrethe Vestager, the EU's long-time antitrust chief, on Tuesday announced she is taking leave from commission as she pursues a bid for the Presidency of the European Investment Bank.

Microsoft said in statement that it welcomes investigation into some of its services that it described as “challengers in the market.”

Google and Meta spokespeople said the firms would would review Wednesday's decision, while Amazon said the firm is “committed to delivering services that meet our customers' requirements within Europe's evolving regulatory landscape.”

In July, the commission announced that several platforms had notified the EU they meet thresholds to be designated as a so-called gatekeeper, which includes having a sales across the bloc of at least €7.5 billion ($8.2 billion) or a market capitalization of €75 billion and above.

Platform services are also required to have more than 45 million monthly active end-users and more than 10,000 yearly active business users in the EU, to fall under the rules.

EU officials are expecting their decisions to be taken to court in cases that'll likely be drawn out for years.