Apple, Meta close to settling cases related to EU's Digital Markets Act

[Apple To Release Quarterly Earnings After Markets Close]
Drew Angerer

Apple (NASDAQ:AAPL [https://seekingalpha.com/symbol/AAPL]) and Meta Platforms (NASDAQ:META [https://seekingalpha.com/symbol/META]) are close to settling two antitrust cases with the European Commission, as the companies look to avoid escalating fines from the EU regulator, the _Financial Times_ reported.

The companies are in the final stages of agreeing to a deal with European regulators to revamp a range of business practices, the report added [https://www.ft.com/content/74a31a0f-d4d2-4681-9ce8-3a1b5a7632dc].

Apple and Meta did not immediately respond to a request for comment from Seeking Alpha.

In April, the European Commission, or EC, fined [https://seekingalpha.com/news/4433859-apple-sees-500m-fine-while-meta-gets-200m-penalty-in-eu] Apple €500M and Meta €200M for allegedly breaching the region's Digital Markets Act, or DMA. The EU regulator said then that Apple breached its anti-steering obligation under the DMA and that Meta breached the DMA obligation to give consumers the choice of a service that uses less of their personal data.

The potential settlement comes amid the EU’s digital rules being a flashpoint between Brussels and U.S. President Donald Trump, who had warned to retaliate against countries that “discriminate” against U.S. companies.

The EU had ordered Meta to change its “pay or consent” model, which forces users to either consent to ad-supported service or pay a subscription fee for an ad-free experience.

European officials told the news outlet that there was growing optimism that a workable solution could be found with Meta after initial changes proposed by Meta were considered not sufficient. The officials noted that the most sensitive remaining issue in discussions with Meta was to ensure that consumers can easily find and navigate the different options the group is offering in the EU, the report added.

Apple already announced plans in June to change its App Store policies after the EU’s investigation into whether the iPhone maker’s rules prevented app developers from sending consumers to offers outside its platform.

The Commission is also discussing potential changes with Apple related to another probe into the company on its new contractual terms for developers. While the negotiations are continuing with the two groups, people briefed on the discussions said no final decisions have been made, but they were hopeful the cases would be settled soon, the report noted.

Meta confirmed discussions were ongoing and constructive. “Compliance means that developers get a real chance and that users get a real choice, not buried under a maze of dark patterns from gatekeepers,” said the Commission, the report noted.

The regulator is still collecting input from stakeholders on the changes made by Apple. “With Meta, we shared our remaining concerns in July, which we continue to discuss.” The Commission noted that if Apple or Meta continued to be in breach of their obligations, “all options remain on the table, including periodic penalty payments," the report added.

MORE ON META AND APPLE

* Apple: Has Adopted The Razor-Blade Model [https://seekingalpha.com/article/4828447-apple-has-adopted-the-razor-blade-model]
* Meta: Market Misprices Intact Fundamentals [https://seekingalpha.com/article/4828410-meta-market-misprices-intact-fundamentals]
* Meta Edges Higher As Key Support Holds And Europe Legal Risk Clouds Outlook [https://seekingalpha.com/article/4828172-meta-edges-higher-as-key-support-holds-and-europe-legal-risk-clouds-outlook]
* Ive rebukes smartphones, vows to create 'happy' AI devices with OpenAI [https://seekingalpha.com/news/4502380-ive-rebukes-smartphones-vows-to-create-happy-ai-devices-with-openai]
* Schwab Trading Activity Index advances further in September [https://seekingalpha.com/news/4502093-schwab-trading-activity-index-advances-further-in-september]