Don’t Fall for the Big Tech B.S: The European Commission’s Fines Against Apple and Meta are not ‘Retaliatory Tariffs’
On April 23, the European Commission (EC) announced its decision to fine Apple and Meta for breach of their obligations under the European Digital Markets Act (DMA), a flagship legislation that aims to promote fair competition in the digital ecosystem.
Per the EC’s announcement, Apple is to be fined a sum of EUR 500 million for failing to comply with “anti-steering” obligations, while Meta has been fined EUR 200 million for implementing a “consent-or-pay” model. The companies must comply with the decision within 60 days, failing which they face additional penalty payments. Meta and Apple are quite obviously unhappy with the decision and have hilariously termed the fines “tariffs,” no doubt hoping that President Trump will come to their rescue by pressuring the EU to back down.
US Attacks on EU Digital Regulation
The EC’s announcement comes in the wake of the Trump administration’s all-out attack on the European Union’s digital policies. Beginning with Vice President Vance’s comments during his trip to the EU in February, the Trump administration has made it clear that it sees any foreign regulation of US-based Big Tech companies as an attack on the U.S.
It was, accordingly, no surprise to see the U.S. Trade Representative’s National Trade Estimates (NTE) Report, released on March 31, include a host of European digital economy-related policies as supposed non-tariff trade barriers. The NTE report is an annual report published by the U.S. Trade Representative that lists non-tariff barriers to trade. It is typically seen as a corporate wish-list targeting foreign public interest regulations, and despite some improvements in the 2024 report under the previous administration, this year’s report goes back to parroting industry complaints.
What makes this year’s NTE report particularly important is that President Trump specifically linked the supposed non-tariff barriers identified in this report to the imposition of ‘reciprocal tariffs’ during his “Liberation Day” announcement on April 2.
The announcement of “retaliatory tariffs” by President Trump has led the EU to consider its options to fight back, including by targeting US tech companies. Options being considered include the imposition of digital services taxes, the exclusion of U.S.-based Big Tech companies from EU cloud security certification schemes, the use of anti-coercion laws, etc., all of which could significantly impact the bottom lines of Big Tech companies.
Tech Accountability, Not Retaliation
Despite claims by Meta that the EC fine is a “tariff” on American firms or is designed to “handicap” American firms, nothing could be further from the truth.
First, it is important to keep in mind that Big Tech companies have denounced regulations aiming to promote competition in the digital economy for a number of years now. Big Tech companies have repeatedly alleged that competition laws in a number of jurisdictions are designed to target US-based companies. These claims are false. None of the laws in question – in the EU, Japan, Korea, etc. – specifically target U.S companies.
Laws such as the DMA are neutral, applying to companies irrespective of their country of origin. However, the fact that U.S.-based companies dominate and monopolize various sectors of the digital economy implies that they will naturally face greater antitrust scrutiny. In fact, the EU Commission has designated a Chinese company, Bytedance, the owner of TikTok, as a “gatekeeper” under the DMA, together with five American companies – Alphabet, Apple, Meta, Amazon, and Microsoft. It has also notified Chinese and European companies, together with U.S. Big Tech companies, as “very large online platforms” under the Digital Services Act.
Second, the EU initiated action against Apple and Meta in early 2024, well before the current Trump administration assumed power. The EU also engaged in negotiations with the two companies seeking to secure voluntary compliance with the DMA. The decision by the EC was reached pursuant to an investigation, involving the presentation of a defense by the companies involved. The two companies also have the option of appealing the EC decision, which they have indicated they intend to do.
Third, the EU has not imposed the maximum possible fines against the two companies, which could extend to 10% of the company’s global annual turnover. The fines have been reported in US media as being “modest” and have been criticized as being insufficient in some quarters. If the decisions by the EC were entirely political, the fines could have been far greater or imposed only after the US formalized its “retaliatory tariffs.” By way of comparison, Big Tech companies have already faced much larger fines for non-compliance with EU digital regulations such as the General Data Protection Regulation. For example, Meta was fined EUR 1.2 billion by the Irish Data Protection Commission in 2023, while Amazon was fined EUR 746 million by the Luxembourg Data Protection Commission in 2021.
Finally, the EU has, while announcing the fines against Apple and Meta, also announced that it is closing its investigation into Apple’s DMA obligations pertaining to user choice. In this instance, Apple and the EC engaged in a constructive dialogue as a result of which Apple made it easier for consumers to exercise certain choices on its platforms, such as modifying default settings and options. Were the EC’s decision to fine Apple and Meta was an entirely political one, there is no reason for the EC to have closed this investigation.
The EC’s action must be seen for what it is – an attempt to enforce much-needed fairness and pro-competition rules in the digital ecosystem and protect consumers and small businesses from predation by Big Tech companies. The EC’s actions have been commended by a number of consumer and digital rights organizations. Big Tech companies, aided by a complicit US administration, on the other hand, are clearly only interested in enhancing their profits, irrespective of the harms that this may cause consumers or the digital ecosystem more generally.