Authors of this article: Malgorzata Wojtas and Heiner Mecklenburg
On April 23, 2025, the European Commission imposed fines of EUR 500 million (Apple) and EUR 200 million (Meta) for violations of Regulation (EU) 2022/1925 (Digital Markets Act, "DMA"). The fines are based on findings that Apple, through the design of its App Store, and Meta, through the "Consent or Pay" model of the social networks Facebook and Instagram, violated DMA obligations.
The DMA is a European regulation aimed at ensuring fair and competitive markets in the digital sector. It addresses the activities of so-called "gatekeepers." Gatekeepers are large digital platforms that occupy a key position in the digital economy by connecting many commercial users with many end users (consumers). The Commission has so far designated seven companies (Alphabet, Amazon, Apple, Booking, ByteDance, Meta, and Microsoft) as gatekeepers concerning 23 core platform services of these companies, including the Apple App Store and Meta's social networks Facebook and Instagram. These designated gatekeepers are subject to special obligations under Articles 5 to 7 DMA.
Apple: on what grounds does the Commission allege a violation of Article 5(4) DMA (DMA.100109)?
Pursuant to Article 5(4) DMA, Apple, as a gatekeeper, must allow its business users (app developers) to inform end users (app consumers) – including those acquired through the App Store – about alternative (cheaper) offers outside the App Store, steer them to these offers, and conclude (purchase) contracts with end users outside the App Store free of charge. In its compliance report of March 7, 2024, Apple listed the following measures to ensure compliance with Article 5(4) DMA:
- Apple allows the setting of links through a clickable URL (so-called link-outs) within the software application ("app") of a business user downloaded from the App Store, but charges a commission of 17% (10% for subscriptions after the first year) on all purchases of digital content made within seven days after a link-out for the entire duration of the app's use.
- Apple does not allow web views. The link provided by the business user in their app can only redirect end users to the business users' website, which opens in a new window in the device's default browser.
- Apple restricts the possibility of link-outs within the app of a business user if the business user has opted out of Apple's in-app payment system.
The Commission found Apple's measures to be potentially non-compliant with DMA requirements and therefore initiated a non-compliance procedure on March 25, 2024. In its preliminary assessment of June 24, 2024, the Commission criticized the following practices in particular:
- Restriction of app developers from freely steering their customers: For example, app developers are not allowed to provide price information within the app or otherwise promote (cheaper) offers on alternative distribution channels.
- Restrictions on link-outs: The link-out process is subject to several restrictions imposed by Apple, preventing app developers from promoting offers and concluding contracts through the distribution channel of their choice.
- Unreasonably high fees: For example, Apple charges app developers a fee for every purchase of digital products made by an end user within seven days after a link-out from the app.
After the one-year defense period expired, the Commission issued a non-compliance decision on April 23, 2025, with the following elements:
- Finding that Apple violated Article 5(4) DMA;
- Order to eliminate the technical or commercial restrictions on steering end users to alternative offers of business users within 60 days and to refrain from violations in the future;
- Imposition of a fine of EUR 500 million for violating Article 5(4) DMA.
Meta: on what grounds does the Commission allege a violation of Article 5(2) DMA (DMA.100055)?
According to Article 5(2) DMA, gatekeepers are required to obtain the consent of end users for data processing where personal data is combined or used across different core platform services. Until March 2024, Meta allowed end users of Facebook and Instagram to choose whether they:
- Use Meta's services for free but agree to the processing and merging of their personal data to finance the services through personalized advertising; or
- Refuse consent to the processing and merging of their personal data. In this case, the financing of the (ad-free) services was done through a monthly subscription fee. The fees were EUR 9.99 per month for desktop subscribers for the first account and EUR 6.00 for each additional account. App subscribers had to pay EUR 12.99 for the first account and EUR 8.00 for each additional account.
In its decision to initiate the non-compliance procedure on March 25, 2024, the Commission explained the purpose of Article 5(2) DMA, which is to prevent the creation of market entry barriers through the accumulation of personal data (for the provision of online advertising services by the gatekeeper) and to give end users a free choice regarding the processing of their personal data, which is only the case if the use of the service (or certain functions) does not depend on consent to data processing and if a comparable alternative service is offered in case of refusal of consent.
In the non-compliance decision of April 23, 2025, the Commission assessed Meta's business model practiced until March 2024 as a violation of Article 5(2) DMA, as it:
- Did not provide end users with the required choice to opt for a service that uses less personal data but is otherwise equivalent to the service based on "personalized advertising"; and
- Did not allow end users to exercise their right to freely consent to the merging of their personal data.
For the period of the violation of Article 5(2) DMA until March 2024, the Commission imposed a fine of EUR 200 million. Since Meta no longer offers the model and the new consent model is still under review, the Commission did not issue a cease-and-desist order.
Outlook: Private (consumer) lawsuits against Apple and Meta?
Consumer protection organizations could potentially take legal action against Meta under the DMA. In May 2024, the consumer protection organization – Verbraucherzentrale Nordrhein-Westfalen, filed an injunction against Meta before the Higher Regional Court of Cologne for violating the General Data Protection Regulation through Meta's "Consent or Pay" model (Case No. 15 UKl 1/24). In a similar case, the consumer protection organization Saxony filed a remedy action against Amazon under the new German Consumer Rights Enforcement Act (Case No. 102 VKl 1/24 e). The Commission's non-compliance decision against Meta strengthens potential plaintiffs. Plaintiffs could additionally base claims for damages on the DMA, as its provisions are enforceable under civil law (see Article 39 on cooperation between national courts and the Commission). Plaintiffs could claim the subscription fees collected until March 2024 as damages. It is unclear whether subscribers without paid accounts could claim damages – however, in the lawsuit against Amazon, the Plaintiff is claiming 50% of the subscription fees (for the cheaper Amazon offer with additional advertising).
Apple could also face private lawsuits. In particular, app developers could claim damages for the fees under Apple's seven-day rule (see above), which the European Commission found to be unreasonably high. It is also conceivable that Plaintiffs claim lost profits if Apple's practices restricted end users' access to alternative distribution channels (outside the App Store). Given the potentially high amounts involved, process-financed class actions (Inkasso-Sammelklagen) may be considered (see our contribution of February 25, 2025).
PwC Legal advises companies on all questions of private enforcement of antitrust law and the DMA, including litigation defense against unjustified claims. Thanks to integrated AI solutions, PwC Legal ensures individually optimized case management. Our team includes experts with years of litigation experience in antitrust damages cases – including antitrust and litigation lawyers, competition economists, IT specialists, and service center staff.
