At the end of April, the European Commission announced a landmark decision, finding tech giants Apple and Meta in breach of the Digital Markets Act (DMA). This decision marks a significant step in the EU’s ongoing efforts to regulate digital markets and ensure fair competition as it’s the Commission’s first non-compliance decision ever adopted under the DMA. The Commission’s findings and the subsequent penalties imposed on these companies highlight the importance of compliance with the DMA and open new avenues for private enforcement.
Summary of the Commission’s Findings
The Commission’s investigation revealed that both Apple and Meta violated specific obligations under the DMA. Apple was found to have breached its anti-steering obligation, which prohibits gatekeepers from restricting business users from directing consumers to offers outside the gatekeeper’s platform. As a result of this breach, Apple has been fined EUR 500 million.
Meta, on the other hand, was found to have violated the DMA obligation to provide consumers with the choice of a service that uses less of their personal data by its “Consent or Pay” advertising model. This obligation aims to protect consumer privacy and to ensure that users have control over their personal information. Meta’s failure to comply with this requirement has led to an EUR 200 million fine.
Private Enforcement Possibilities
The DMA, while primarily enforced by the Commission, also opens the door for private enforcement. Private enforcement in this context refers to the ability of individuals, businesses, and other entities to seek legal remedies for breaches of the DMA through national courts. While private DMA enforcement is ultimately possible at any time on a stand-alone basis once a gatekeeper with a core platform service has been designated and the six-month implementation period for the DMA’s obligations has expired, with a Commission non-compliance decision, corresponding private enforcement efforts can also be pursued on a follow-on basis. This can include claims for damages, injunctions, and other forms of relief:
- Damages Claims.One of the most significant aspects of private enforcement is the potential for damages claims. Businesses and consumers affected by DMA breaches could seek compensation for harm suffered as a result of DMA violations. For example, a business that lost revenue due to anti-steering practices could file a lawsuit seeking compensation.
- Injunctions. In addition to damages, private parties can also seek injunctions to prevent ongoing or future breaches of the DMA. An injunction is a court order that requires a party to conduct or refrain from specific actions.
- Collective Redress. The DMA also paves the way for collective redress mechanisms, such as class actions. These mechanisms allow groups of affected individuals or businesses to join forces and file a single lawsuit against a gatekeeper. Such collective redress might be particularly effective in cases where individual claims are too small to pursue independently but collectively represent significant harm.
Cooperation with National Courts
The DMA includes provisions for cooperation between the Commission and national courts. This cooperation is meant to ensure that national courts have the necessary information and support to effectively enforce the DMA. It also allows for a coordinated approach to enforcement, with the goal of enhancing the overall effectiveness of the DMA.
Conclusion
The Commission’s decision to fine Apple and Meta for breaches of the DMA is a pivotal moment in the regulation of digital markets as it marks the Commission’s first non-compliance decisions ever adopted under the DMA. This sends a clear message to gatekeepers that compliance with the DMA is non-negotiable. Moreover, the decisions might open new avenues to follow for private enforcement.
As the DMA continues to shape the digital landscape, private enforcement could thus become increasingly important.
Photo by Braydon Anderson on Unsplash
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