Meta will face a potential confrontation with European technology regulators this week regarding accusations of breaching the Digital Market Act (DMA), Europe’s antitrust laws.
On Friday, the European Commission (EC), which acts as the EU’s administrative arm, cautioned Meta Platforms Inc., the organization behind Facebook and Instagram, that it might begin imposing daily penalties, adding up to over $150 million a week, if they fail to comply with the Digital Markets Act (DMA) promptly.
According to the regulations, companies within the EU could potentially face fines equal to up to 5% of their average daily global revenue for rule-breaking. For instance, Meta, with a reported annual turnover of $164.5 billion in 2024 (approximately $450 million per day), would be looking at a daily fine of around $22.5 million if the maximum penalty was imposed. However, it’s worth noting that historically, the EU has seldomly levied fines close to the maximum amount permitted by law.
The main point of contention is Meta’s proposed “pay-or-play” policy, which requires users in the EU to either agree to have their data utilized for personalized ads or opt for a monthly subscription (starting at €9.99/$11.75) to enjoy an ad-free experience on Facebook or Instagram.
The European Commission has stated that the “all-or-nothing” approach goes against the Digital Markets Act (DMA) because it doesn’t offer an option for using only necessary personal data, as mandated by the regulation. However, Meta adjusted its strategy in November 2024 to supposedly decrease the amount of personal data used for targeted ads. Yet, the Commission is still skeptical that Meta’s actions align with the law.
Meta argues that the EU is changing the rules during compliance talks, alleging an unfair focus on their specific business practices.
A Meta representative stated to Reuters that the European Commission is still favoring an American company’s business structure over others. They noted that offering users a choice between a subscription without ads or a free service with ads is considered a valid business approach across Europe, yet it appears this option isn’t being extended to Meta.
American tech giants like Meta, along with others, have been arguing that regulations such as the Digital Markets Act (DMA) and other international rules are unjustifiably targeting them, while secretly helping or financially backing domestic companies.
Over the weekend, I learned that Canada scrapped their digital services tax – a levy on large platforms’ revenue from Canadian users – to rekindle trade discussions with the United States. However, President Trump has decided to withdraw from these negotiations, alleging that this tax was nothing more than a hostile move aimed at American corporations, which he termed as a “brazen assault.
As a gamer, I’d say the Digital Markets Act (DMA) is all about keeping online gaming platforms fair and competitive. This law takes aim at these “gatekeepers,” large platforms that might misuse their dominance in the market. It’s not cool when they give an unfair advantage to their own games or products, block developers from using external payment systems, or track players for targeted ads without our consent. The DMA aims to stop such practices and ensure a level playing field for everyone involved in the digital gaming world.
In April, the European Union imposed a fine of €500 million ($570 million) on Apple for breaching Digital Market Act (DMA) regulations. Recently, Apple has implemented substantial modifications to its service terms within the EU, specifically concerning third-party apps like Spotify and Fortnite’s creator, Epic Games, in the App Store. Rather than collecting a standard 30% commission for sales of third-party app transactions, the commission rate in the EU will now vary between 2% to 13%, based on different decisions made by third-party developers.
On Monday, the European Commission convened a gathering to consult with users, creators, and even companies such as Spotify from Sweden, regarding potential modifications. They will discuss if these changes align with the Digital Markets Act (DMA).
In their statement, Apple expressed continued disagreement with the European Commission about the Digital Markets Act (DMA) and announced their intention to challenge (or appeal) the imposed fine.
The Hollywood Reporter has reached out to the European Commission for comment.
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2025-06-30 20:54