Apple, Meta fined Sh103.3 billion by EU in first major use of digital rules

The European Union has imposed hefty penalties on U.S. tech giants Apple and Meta, escalating tensions over digital regulation and transatlantic trade.

The fines, which total €700 million (Sh103.3 billion), mark the EU’s first major enforcement under its new Digital Markets Act (DMA), aimed at curbing monopolistic behavior among dominant online platforms.

Apple was fined €500 million (Sh73.8 billion) for restricting app developers from informing users about alternative, often cheaper, payment options outside the App Store.

The European Commission stated that Apple’s policies blocked developers from fully utilizing external distribution methods and denied users better offers elsewhere.

In a separate case, Meta was ordered to pay €200 million (Sh29.5 billion) for its controversial "Consent or Pay" model, introduced last year.

This system required users in the EU to either allow the use of their personal data for targeted advertising or pay a monthly fee to use platforms like Facebook and Instagram without ads.

According to the Commission, Meta’s approach did not present a true choice, undermining users' ability to freely consent to personal data processing, a key principle of EU privacy law.

The decisions sparked swift backlash from the companies. Apple accused the Commission of unfair treatment and claimed its efforts to comply were ignored.

"We’ve invested hundreds of thousands of engineering hours and made changes, only to find the goalposts moved every step of the way," the company said in a statement, also warning that the decision could compromise privacy and innovation.

Meta echoed that sentiment.

"This isn't just about a fine; the Commission forcing us to change our business model effectively imposes a multi-billion-dollar tariff on Meta while requiring us to offer an inferior service," said Joel Kaplan, Meta’s chief global affairs officer.

The Computer and Communications Industry Association (CCIA), representing both firms, also criticized the ruling, calling it opaque and politically driven.

Consumer advocacy groups, however, applauded the enforcement. Agustin Reyna, head of BEUC, a major European consumer organization, called the move a “gamechanger.”

He argued that Apple and Meta had been given ample time to adjust, but instead sought to bend the rules.

"Consumers deserve better choices, and businesses need fairer market conditions," he said.

Though the fines are notable, they remain below the DMA’s maximum penalty of 10% of a company’s global turnover.

Apple earned $391 billion (Sh50.83 trillion) last year, while Meta brought in $165 billion (Sh21.45 trillion).

EU officials insisted the fines were appropriate given the newness of the law and the limited period of non-compliance.

Still, questions linger over the broader political implications.

The Commission reportedly postponed the decision to avoid intensifying tensions with Washington, which has voiced concerns over EU regulations targeting American tech firms.

Analysts suggest the move could strain already fragile trade relations.

"The EU’s digital regulations have now become inevitably geopolitical," said Giorgos Verdi from the European Council on Foreign Relations.

He added that Europe is increasingly viewing tech regulation as essential to its digital independence.

A White House memo from February hinted at possible retaliatory steps if the EU pursued penalties under the DMA or the Digital Services Act (DSA), which targets harmful content and online disinformation.

The EU isn’t done. Investigations into other tech firms, including Google and Elon Musk’s platform X, are ongoing.

X has already been flagged for violating the DSA, although no formal penalty has been announced.

Pressure is mounting on the European Commission to move faster.

The S&D group in the European Parliament recently urged quicker enforcement, stating, "We will not water down our digital laws to appease those who wage trade wars."

European Commission President Ursula von der Leyen has signaled the EU will continue applying its digital laws rigorously, regardless of diplomatic pressure.

In a recent interview, she noted that large tech companies should prepare for stricter scrutiny, emphasizing Europe’s commitment to upholding its digital standards.