Understanding the Apple and Meta Non-Compliance Decisions Under the Digital Markets Act

Megan Kirkwood is a fellow at Tech Policy Press.

The European Commission has issued its first non-compliance decisions under the Digital Markets Act (DMA). Last March, the Commission opened non-compliance investigations into Alphabet's rules on steering in Google Play and self-preferencing on Google Search, Apple's rules on steering in the App Store and the choice screen for Safari, and Meta's “pay or consent model.” Since launching these investigations, the Commission has sent out preliminary findings of non-compliance to all three gatekeepers.

On April 23, 2025, Apple and Meta were both found to be non-compliant with the law and fined €500 million and €200 million, respectively. They have been given 60 days to comply with the Commission's decisions. Otherwise, they risk periodic penalty payments beginning on the day the infringement was committed and are subject to a 5-year limitation period. While the Commission closed its investigation into Apple's user choice obligations—a previously found area of non-compliance—it issued further preliminary findings of non-compliance, signaling Apple could face more non-compliance decisions in the future.

Apple's App Store practices

After opening the investigations last March, on June 24, 2024, the Commission informed Apple of its preliminary findings that the company was not complying with the law. This finding informed Apple that its business terms continued to impose anti-steering provisions on developers who wish to communicate external offers or alternative distribution methods to end users. For example, developers were still unable to communicate better offers within their apps and could only offer promotions through a link in their app that redirects the user to a web page. However, developers that decide to use other payment methods than Apple’s in-app purchase system, or offer apps which link out to the developer webpage, their apps have to display “in-app disclosure screens”, otherwise known as “scare screens” which are largely seen as adding friction and preventing users for opting for alternatives to Apple’s ecosystem.

Apple was also informed that while it can charge “a fee for facilitating via the App Store the initial acquisition of a new customer by developers,” it imposes fees that are too onerous to be considered “strictly necessary for such remuneration.” When the investigation was launched, apps linking out to a developer's webpage would incur a fee of up to 17%. However, after the preliminary findings were released, Apple made an update allowing app developers more freedom to promote offers within the app, but imposed a 5% “initial acquisition fee” and an ongoing 10% “store services fee” on purchases made via link-outs.

The initial fee is “for sales of digital goods and services, made on any platform, that occur within a 12-month period after an initial install” while the ongoing store services fee is “for sales of digital goods and services, made on any platform, that occur within a fixed 12-month period from the date of an install, including app updates and reinstalls.” Therefore, Apple has continued to employ a compliance method of offering app developers more freedom at a steep cost.

Given these practices, the Commission has concluded that Apple fails to give Apple App Store developers the freedom “to inform customers, free of charge, of alternative offers outside the App Store, steer them to those offers and allow them to make purchases.” It also finds that Apple “has failed to demonstrate that these restrictions are objectively necessary and proportionate.”

As part of the non-compliance decision, “the Commission has ordered Apple to remove the technical and commercial restrictions on steering and to refrain from perpetuating the non-compliant conduct in the future, which includes adopting conduct with an equivalent object or effect.” Concretely, this will mean Apple has to allow developers to communicate external offers or alternative distribution methods to end users within their apps without having to pay fees to Apple.

Apple spokesperson Emma Wilson said in a statement that the company will appeal and that the Commission’s decisions are “yet another example of the European Commission unfairly targeting Apple. [...] Despite countless meetings, the Commission continues to move the goal posts every step of the way.” An Apple representative reportedly also said that Apple is being forced to “give away technology for free.”

Meanwhile, Maria Luisa Stasi, Head of Law and Policy for Digital Markets at civil society group ARTICLE 19, released a statement welcoming “the impact of the cease-and-desist orders on market dynamics” and the ability for users to have more choice. Civil society group EDRi also released a statement, writing that Apple has put up artificial barriers to competition and has “a long history of obstructing people’s device and software freedoms, under the guise of digital security and privacy.”

User choice obligations investigation dropped

As part of the investigations opened last March, the Commission had been investigating Apple’s proposed measures to “comply with the obligations to enable end users to easily un-install any software applications on iOS and to easily change default settings on iOS including through prompting end users to choose their default web browser from a list of the main available service providers.” Last March, as part of the iOS 17.4 update which rolled out DMA changes, Apple allowed EU users to “download alternative browser engines that aren’t based on Apple’s WebKit, such as Chrome and Firefox, with a new choice screen in iOS Safari that will prompt users to select a default browser when opened for the first time.” In August 2024, Apple made further changes, meaning the default display added more information and browser developers were given new data on their browser’s performance in the choice screen, including selection rates.

The Commission has now closed the investigation, stating that they have had “constructive dialogue” with Apple, resulting in Apple changing its browser choice screen and improving the “user experience of selecting and setting a new default browser on iPhone.” The Commission has stated its approval of Apple’s compliance measures, stating:

“Apple also made it easier for users to change default settings for calling, messaging, call filtering, keyboards, password managers, and translation services on iPhones. A new menu now allows users to adjust their default settings in one centralised location, streamlining the customisation process. In addition, users can now uninstall several Apple pre-installed apps, such as Safari — a functionality previously unavailable.”

New preliminary findings of non-compliance

Last June, the Commission also opened an additional non-compliance investigation into Apple's contract terms for developers wishing to offer alternative app stores or offer an app via an alternative distribution channel. The Commission stated its intention to investigate Apple’s Core Technology Fee, its “multi-step user journey to download and install alternative app stores or apps on iPhones”, and the company’s eligibility requirements for developers to offer alternative app stores or distribute apps from web browsers on iPhones.

Apple’s Core Technology Fee charges developers €0.50 for each first annual install over one million in the past 12 months, only charged if the developer earns more than 10 million euros in global business revenue. While the fee won't apply to the majority of apps, it serves as a monetary ceiling, preventing apps from becoming successful without potentially incurring vast fees. It is likely designed to punish critics of Apple, Spotify, and Epic Games, who have both brought competition cases to the EU over Apple’s conduct and complained about the company’s compliance with the DMA.

On the two other investigated terms, the Commission will assess the multi-step user journey to download alternative apps and app stores on iPhones. Epic Games has published its own findings regarding the user journey for installing alternative app stores, finding that Apple imposes 15 steps that users must navigate. Epic found that “more than 50% of the time a player tries to install the Epic Games Store on Android or iOS, they are unsuccessful due to onerous scare screens. In the European Union, an additional 5 million attempts to install the Epic Games Store were blocked by Apple’s browser and operating system ‘Eligibility Requirements’.”

Moreover, to distribute alternative app marketplaces, Applerequires either a standby letter of credit from an A-rated financial institution in the amount of €1,000,000 or “be a member of good standing in the Apple Developer Program for two (2) continuous years or more, and have an Application that had more than one (1) million First Annual Installs on iOS and/or iPadOS in the EU in the prior calendar year.”

The Commission has now informed Apple that it takes the preliminary view that the company has breached the DMA due to these terms imposed on developers. The press release writes that:

“Developers wanting to use alternative app distribution channels on iOS are disincentivised from doing so as this requires them to opt for business terms which include a new fee (Apple's Core Technology Fee). Apple also introduced overly strict eligibility requirements, hampering developers' ability to distribute their apps through alternative channels. Finally, Apple makes it overly burdensome and confusing for end users to install apps when using such alternative app distribution channels. The Commission has preliminarily found that Apple has failed to demonstrate that the measures put in place are strictly necessary and proportionate.”

Apple can now make changes to bring these policies into compliance or face another non-compliance decision, which could result in further fines.

Meta's "pay or consent"

Quickly following Apple, the Commission sent its preliminary findings of non-compliance to Meta on July 1, 2024. Unlike Apple and Alphabet, the Commission has focused on only one policy that Meta introduced to bring its social media platforms into DMA compliance. The Commission explains that under Article 5(2) of the DMA, “gatekeepers must seek users' consent for combining their personal data between designated core platform services and other services, and if a user refuses such consent, they should have access to a less personalized but equivalent alternative. Gatekeepers cannot make use of the service or certain functionalities conditional on users' consent.”

To fulfill this obligation, Meta introduced a “pay or consent” model for Instagram and Facebook, offering users the choice of either paying a monthly subscription fee for an ad-free version or using the services for free but agreeing to personalized ads and presumably the data collection that goes along with personalized advertising. The Commission argued that the binary option doesn’t “allow users to opt for a service that uses less of their personal data but is otherwise equivalent to the ‘personalized ads’ based service,” or “allow users to exercise their right to freely consent to the combination of their personal data.”

In response, Meta announced changes to its non-personalized ads subscription service offered to users in the EU on November 12, 2024. The monthly subscription was reduced from €9.99 to €5.99/month on the web and from €12.99 to €7.99/month on iOS and Android. Meta is now also offering two different free versions of its social media, either with personalized ads or less personalized ads. The caveat for choosing the less personalized free option is that users will have to view unskippable ads.

In the non-compliance decision, Meta’s previous binary pay or consent option has been found non-compliant “between March 2024, when the DMA obligations became legally binding, and November 2024, when Meta's new ads model was introduced.” On the new terms announced in November, the Commission is still “assessing this new option and continues its dialogue with Meta, requesting the company to provide evidence of the impact that this new ads model has in practice.”

The outcome will depend on whether the Commission views the “less-personalized ads” option as being sufficient to offer a less personalized but equivalent alternative, as required by the law. It is also unclear if users will have less data collected if they choose the less-personalized option, and how much “less” personalized the service becomes. I also previously wrote that unskippable ads “could be enough for some users to switch back to a personalized ads version, which would help Meta’s argument that consumers prefer personalized ads.”

Meta quickly released a public statement in response to the decision.

“The European Commission is attempting to handicap successful American businesses while allowing Chinese and European companies to operate under different standards. 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. And by unfairly restricting personalized advertising the European Commission is also hurting European businesses and economies.”

Meta is clear in its attempt to provoke ire from the US administration, which has opposed other nations enforcing digital laws against US tech giants.

Are the fines enough?

The Director General of the European Commission’s DG COMP, Olivier Guersent, has been clear that the “rationale for the DMA is compliance, not punishment.” DMA fines have become increasingly politicized as the final decisions were delayed, which has “dragged [the DMA] into the global trade war.” Indeed, Anna Cavazzini, Chair of the Committee on the Internal Market and Consumer Protection wrote in a public statement that “[i]t would have been extremely worrying if the Commission had further delayed the procedures already outlined in the law, giving the impression that the EU is being blackmailed by Trump's threats."

There has been speculation that the avoidance of imposing large DMA fines is linked to the global trade war. Therefore, it seems likely that compliance discussions will be emphasized over fines. While a focus on bringing gatekeepers into compliance through more active participation in designing compliance solutions is both welcome and logical, without the threat of large fines, will gatekeepers feel any pressure to actually comply? DMA fines were designed to be colossal due to the general acceptance that paying fines has so far been considered a cost of doing business for big tech and has not led to concrete results. Taking away that leverage could water down the effects of the DMA, as gatekeepers could continue to put forward solutions that continue to poke loopholes in the law.

The fines issued are well below the thresholds the DMA stipulates, which can reach 10% of a gatekeeper's total worldwide turnover in the preceding financial year. However, the decisions leave the possibility for periodic penalty payments if they continue to not comply with the law. Periodic penalty payments can reach up to 5% of the average daily worldwide turnover in the preceding financial year per day. Therefore, the Commission maintains the flexibility to ramp up fines in the future if the companies continue not to adhere to the law.

Barbara Moens reported for the Financial Times that “[w]hile the fines imposed on Meta and Google are minimal, officials said there is still nervousness about how Trump will react.” Previously, the Trump administration had threatened tariff retaliation if the EU went ahead with law enforcement against US platforms. However, days before the fines were announced, Commission President Ursula von der Leyen publicly stated that enforcement would go ahead regardless of “where a company's from and who's running it.” It remains to be seen what, if any, response the DMA decisions provoke from the White House, or if the modest fines will be enough to shield the EU from retaliation.