Apple and Meta, the company behind Instagram and Facebook, have been hit with fines totaling 700 million euros by the European Union. But why exactly? They violated a new European law targeting large tech companies. Apple must pay 500 million euros and Meta 200 million euros. We’ll explain exactly what the companies did to violate this law in this article!
Why were Meta and Apple fined by the EU?
Apple is being fined because the company strongly encourages users to purchase subscriptions through its own App Store, even though subscriptions may be available at a lower price outside the App Store. The restrictions that Apple intentionally imposes hinder developers. Meta is being fined because, for two months, the company offered Instagram and Facebook users two options: a paid subscription to the apps without ads, or free use of Facebook and Instagram in exchange for sharing personal data for advertising purposes. According to the EU, these actions violated the new law designed to prevent large companies from abusing their market power.
How are Meta and Apple responding to the fines?
Apple has already indicated that it plans to challenge the EU’s decision. Meta has criticized the decision. The new EU legislation took effect in March 2024. Immediately upon its implementation, the EU launched an investigation into Meta and Apple and essentially already determined that the tech giants had engaged in “abuse of power.” The fines were actually supposed to be imposed last year, but reports indicate this was postponed due to the trade war with the United States. Even now, there are still concerns about the impact these fines will have on tariff negotiations with President Trump.
How is the U.S. responding to the EU's decision?
The White House disagrees with the fines imposed on Apple and Meta, even calling them “a new form of economic extortion.” A White House spokesperson stated that the U.S. cannot tolerate this, hinting at a countermeasure. “Regulations that target American companies and undermine them, hinder innovation, and enable censorship will be recognized as trade barriers and a direct threat to free civil society,” the spokesperson told the media.
Import duties for the EU
President Trump had previously threatened to impose higher import tariffs on countries that penalize American companies. There are now fears that the fines imposed on Meta and Apple will escalate tensions between the EU and the United States. Trump reportedly already had a phone call with Apple’s CEO regarding fines that Apple was already worried about at the time. The EU’s Democratic Senator wrote a letter to Apple’s CEO last Wednesday asking for clarification on the support the company is receiving from President Trump. There is growing concern within the EU about Trump’s favoritism toward American companies and the consequences this could have for global trade.