Shares in tech giants Meta Platforms (META) and Apple (AAPL) were higher today as hopes were raised that they are close to settling antitrust disputes with the European Union.
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Final Stages
According to a report in the Financial Times, the two companies are in the final stages of reaching an agreement that would get the EU off their back but also lead to changes in their business practices.
Meta and Apple were fined a combined €700 million in April this year for breaching the EU’s Digital Markets Act (DMA), which has been designed to combat the power of dominant online platforms – usually U.S.-made.
Meta was fined €200 million and ordered to alter its controversial “pay or consent” model, which requires users to either accept data tracking or pay for an ad-free experience.
Under this model, EU users of Facebook and Instagram had a choice between consenting to personal data combination for personalized advertising or paying a monthly subscription for an ad-free service.
The Commission found that this model is not compliant with the DMA, as it did not give users the required specific choice to opt for a service that uses less of their personal data.
This is why tech stocks like Meta have legal and regulatory issues as key risks for investors to be aware of – see above.
European officials have reportedly expressed optimism that a workable solution can soon be reached with Meta. However, they noted that one key sticking point remains: ensuring that consumers can easily find and navigate the different options available to them within Meta’s platforms.
Apple Crunch
As for Apple, it has already taken steps to align its policies with EU regulations. In June, it announced plans to change its App Store rules, following an investigation into whether its existing policies unfairly prevented app developers from directing consumers to offers outside of Apple’s ecosystem.
The European Commission is also in discussions with Apple over a separate investigation concerning the company’s new contractual terms for developers.
An agreement would allow Apple and Meta to avoid daily financial penalties, which under the DMA can reach up to 5 per cent of a company’s average daily worldwide revenue.
It could also help to cool tensions between the EU and President Trump who has threatened retaliations against what he believes is discrimination against U.S. tech.
Apple has also criticised the DMA recently declaring that it is leading to a worse experience for its users in the EU.
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