Digital Markets Act Roundup: March 2025
Megan Kirkwood / Apr 8, 2025Megan Kirkwood is a fellow at Tech Policy Press.
Digital Markets Act’s First Anniversary
March 2025 marks the first year of an active Digital Markets Act (DMA). The European Commission initially designated the first gatekeepers on September 6, 2023, with the six-month compliance period ending as of March 6, 2024. That deadline last year ushered in the first concrete changes the gatekeepers made, the first compliance reports published, and the first non-compliance investigations quickly launched. The previous 12 months have shown a commitment by the Commission to proactively enforce the law, particularly in mobile ecosystems, as Apple faces the most regulatory scrutiny.
The Commission has investigated Apple for its rules on developer steering in the App Store, its choice screen design for changing default browsers, and potentially preventing users from uninstalling any software applications on iOS, or easily changing default settings on iOS. The company is also facing scrutiny of its new contractual terms for developers to offer alternative app stores or offer an app via an alternative distribution channel. Additionally, the Commission has instructed Apple to enable interoperability with iOS for third-party connected devices and to streamline the process for future requests for interoperability with iPhone and iPad devices.
Next under review is Alphabet, which the Commission has preliminarily found the company is self-preferencing its products in Google Search. They have also preliminarily found Alphabet is preventing app developers from steering customers to cheaper offers and alternative distribution channels well as finding that “fees charged by Alphabet go beyond what is justified” on Google Play.
While Meta’s subscription model for ad-free services, known as pay-or-consent, has come under scrutiny, the other gatekeepers have largely escaped the enforcement spotlight. The Commission is collecting more information to determine if Amazon is self-preferencing its brand products on the Amazon Store, but the other gatekeepers appear to have lower priority. Microsoft has faced no scrutiny, and the only news on ByteDance over the past year focused solely on its continuing legal challenge to its initial designation. Booking, the most recent gatekeeper addition, has largely been left alone.
The first anniversary of the DMA compliance deadline also marked the expected release of the first non-compliance decisions. Against the backdrop of an increasingly tense geopolitical situation, speculation has grown over whether enforcement, particularly non-compliance fines, could be watered down to avoid provoking President Trump.
Gatekeepers have made last-minute appeals, urging the Trump administration to retaliate against DMA fines in the form of tariffs. In response, “some in the bloc have argued that Europe should respond [to tariffs] by targeting large US technology firms” in the form of its current investigations as well as “various legal instruments to restrict access to government contracts[ …] digital advertising sales” or data transfers. Others argue against politicizing digital laws, stressing that the DMA should “not [...] be leveraged in a trade agreement with the United States.” However, it remains unclear whether fines will be reduced or what form any US retaliation might take. Competition chief Teresa Ribera has been in Washington at the American Bar Association’s annual Antitrust Spring Meeting, and final decisions likely won’t be announced until after her return.
New Enforcement Action Against Google
Self-Preferencing
On March 19, 2025, the Commission informed Alphabet of its preliminary view that certain features of Google Search treat Alphabet's own services more favorably, in violation of Article 6(5) of the DMA. The Commission found that Google shopping, hotel booking, transport, financial, and sports results are ranked more favorably over rivals' competing services, following an investigation and feedback from interested third parties during several workshops. The finding stems from the initial investigation launched last year. It does not necessarily mean that Google will be found to be non-compliant, but it signals that there will be ongoing discussions about the company’s compliance.
In September 2024, it was reported that the Commission had held travel and hospitality workshops to assess Google’s DMA compliance and that Google was working on a new design of its search results. Then, on November 26, 2024, the company announced a redesign to “boost the prominence of comparison sites for free in categories like flights, hotels, and shopping, among others.” It also announced a test on hotel results in Germany, Belgium, and Estonia, which removed interactive features such as the “map, hotel results underneath the map, property info and other data for hotels.” Instead, search results would only include links to individual hotel websites and comparison sites, more akin to traditional blue link results.
The outcome of this test was summarized by Google, which found that users “were measurably less satisfied with their search results and it took them longer to find hotels,” “traffic to hotels and intermediary sites went down,” “[h]otels lost the most traffic (more than 10%), affecting hundreds of thousands of European hotels,” while “[t]raffic to intermediary sites largely stayed flat.” They stopped the test, arguing that removing its interactive features leads to a “lose-lose situation.”
It is also crucial to note that the European Court of Justice threw out an appeal by Google regarding the 2017 Google and Alphabet v Commission (Google Shopping) case, for which Google was handed a €2.4 billion fine. The case found that Google abused its search market dominance by favoring its comparison shopping service over competing services. The Court of Justice confirmed that self-preferencing can constitute abuse of dominance in itself if the practice restricts competition on the merits.
Alphabet can attempt to make further changes to ensure that its products and services are not more favorably ranked or face a non-compliance decision, risking fines of up to 10% of the gatekeeper's total worldwide turnover or 20% in case of repeated infringements. Alphabet said in a statement that the DMA is hurting European consumers and is “already causing European businesses to lose up to 30% of traffic. Users are so frustrated that many are resorting to clunky workarounds to get to the companies and information that they want.”
Anti-Steering
The other preliminary finding of non-compliance found that Alphabet’s app marketplace, Google Play, does not comply with the DMA, as app developers are prevented from freely steering consumers to other channels for better offers, violating Article 5(4). To comply, the company rolled out an external offers program so developers can lead users outside the app to promote offers.
To participate in the program, developers must agree to show a screen warning users that they are leaving the Google Play and must pay an initial acquisition fee of 5% for auto-renewing subscriptions and 10% for other offers of in-app digital features and services. Additionally, a developer is subject to an ongoing services fee of 7% for auto-renewing subscriptions and 17% for other offers of in-app digital features and services. They apply “from the point that a user first completes a transaction within 120 hours of following an external offer (the first external transaction). The fees apply to both the first external transaction and to all digital content subsequently purchased on an external website for use in the app, irrespective of any time window.”
The Commission has argued that while “Alphabet can receive a fee for facilitating the initial acquisition of a new customer by an app developer via Google Play, the fees charged by Alphabet go beyond what is justified. For example, Alphabet charges developers a high fee over an unduly long period of time for every purchase of digital goods and services.” This suggests that while fees may be acceptable, the ongoing nature of the fees might be problematic.
Recital 62 of the DMA stipulates that app stores are an essential gateway for businesses and should “apply general conditions of access that should be fair, reasonable and non-discriminatory.” Specifically, the Recital states that conditions can be unfair,
“if they lead to an imbalance of rights and obligations imposed on business users or confer an advantage on the gatekeeper which is disproportionate to the service provided by the gatekeeper to business users or lead to a disadvantage for business users in providing the same or similar services as the gatekeeper.”
Arguably, the fees could be considered unfair as they disproportionately benefit Google by allowing Google to collect ongoing fees that are disproportionate to the value Google has created. While Google Play facilitated the discovery of the app, is it fair or reasonable to continue to collect fees on an ongoing basis?
Google in a response said that “if we can’t charge reasonable fees to support the ongoing development of Android and the Play services we offer, then we can’t invest in an open platform that powers billions of phones around the world, helping not just those who can afford to spend 1000 Euros on the latest premium model.” Included in the decision is a quote from Ribera who said the “main focus is creating a culture of compliance with the Digital Markets Act. Non-compliance proceedings are reserved for situations where attempts at dialogue have not been successful.” Alphabet can rebuke the findings and enter into dialogue on how to comply, or face a non-compliance decision with the associated fines.
Apple's Specification Proceedings on Interoperability
Concluding the specification proceedings launched in September 2024, the Commission adopted its final specifications on the measures that Apple has to take to comply with its interoperability obligation under Article 6(7). Under this Article, Apple must allow providers of hardware and software services with free and effective interoperability and access to the same hardware and software features accessed or controlled by Apple’s operating system. To comply, Apple introduced a request form for developers interested in obtaining interoperability to apply through, with no information on what features or functionalities would be available.
In December of last year, the Commission launched consultations seeking feedback for the proposed measures for requesting interoperability with Apple’s iOS and iPadOS operating systems, and the Commission’s proposal for enabling interoperability with Apple’s iOS operating system and connected devices. The final measures are slightly pared back compared to the initial proposals, however, Apple is now forced to provide more upfront information to developers on what features and functionalities are available, must undergo a yearly independent audit, publish annual reports, introduce a tracker for developers to understand the progress of their requests, introduce a feedback mechanism, require Apple to produce a detailed explanation of the grounds for rejection and introduce a dispute mechanism. Apple has been given two months to implement this and must report back to the Commission on what it has concretely done to comply.
In addition, the Commission has named specific functionalities that must be readily interoperable, including iOS notifications; high-bandwidth peer-to-peer Wi-Fi connection; proximity-triggered pairing; background execution; close-range wireless file transfer services, including AirDrop; automatic Wi-Fi connection; media casting, including AirPlay; automatic audio switching; and Near Field Communication.
Apple can only reject requests on the basis of security if it “is capable of being independently verified and not exclusively within the gatekeeper’s control.” Apple is not allowed to “impose any restrictions on the type or use case of the software application and connected physical device that can access or make use of the features”, likely to prevent Apple from imposing anticompetitive restrictions on competing services. Apple now has one month to inform the Commission how the company will comply in “sufficient detail to enable the Commission to make a preliminary assessment as to whether the measures comply with the Decision.” This is now legally binding.
New Compliance Reports
As the anniversary of the compliance deadline has rolled back around, gatekeepers must publish their annual reports. Booking, having only had to submit its first report in November 2024, did not have to meet this deadline.
Below are links to the new compliance reports:
And here are the updated consumer profiling reports:
The researchers at SCiDA have provided a helpful overview of the compliance reports, including tracking changes since the first reports were released last year. Apple appears to have made the most changes since last year, likely due to the increased scrutiny the company has been under. Meanwhile, companies that have mostly flown under the radar appear to have made the least changes. As the SCiDA summary argues, the compliance reports have largely not induced substantial changes. Even Alphabet, which is facing potential non-compliance, merely maintains that it is complying with the law, even regarding Articles that underpin investigations against the company. Thus, the compliance reports highlight gatekeepers' insistence that they already comply with the law, rather than showing substantial product or policy changes.
Commission’s Missing Annual Report
Under Article 35 of the DMA, the Commission should publish an annual report on the implementation of the DMA; the progress made towards achieving its objectives; a summary of any adopted measures, decisions and ongoing market investigations; an overview of the cooperation between the Commission and national authorities; and an overview of the activities and tasks performed by the High Level Group of Digital Regulators. However, the report for 2024 is missing. Instead, the High-Level Group for the DMA convened for the fourth time in Brussels on March 7, 2025. The group discussed “the most recent DMA monitoring and enforcement developments since the last meeting of the High-Level Group in May 2024” as well as “an overview of the latest meetings of the High-Level Group thematic sub-groups on data-related obligations, interoperability and artificial intelligence.”
That said, the missing public report removes some transparency into DMA designation and enforcement actions. Last year's report contained valuable insight into companies that submitted notifications that their services meet the DMA threshold and explained why certain core platform services, specifically email and cloud services, had no designated services.
Responses to US DMA Complaints
Last month, I reported that the US had escalated its tariff threat toward the EU after President Trump signed amemorandum warning the DMA would face scrutiny. The Committee on the Judiciary of the US House of Representatives also sent anopen letter to Ribera, requesting “a briefing on your approach to DMA enforcement, ongoing DMA proceedings against American companies, and European plans to subsidize and build national champions.”
In response, Ribera and Henna Virkkunen, the Executive Vice-President for Technological Sovereignty, Security and Democracy, the joint enforcer of the DMA, sent a letter to the Committee. The letter challenges the accusation that the law only targets American firms. It also argues that the “DMA opens up new opportunities and promotes innovation” and confirms the DMA’s implementation process.
In addition, another letter was sent to US Attorney General Pamela Bondi and US Secretary of Commerce Howard Lutnick by European Members of Parliament supporting the DMA. The MEPs also point out that the DMA does not target American companies, arguing that “many American companies are not only benefiting from the DMA but are also actively calling for its enforcement.” The letter names Epic Games, Netflix, Disney, and DuckDuckGo as examples of US companies calling for enforcement of the law and stand to gain “from a fairer competitive landscape under the DMA.”
A week later, Y Combinator, an American startup funder, venture capital firm, and a long list of signatories sent an open letter to the White House, urging the Trump administration to openly support” the DMA. They focus on artificial intelligence and argue that laws like the DMA are “among the only effective tools globally to rein in anti-competitive behaviors such as self-preferencing and blocking interoperability.” While Y Combinator makes it clear that the company is not a fan of European legislation in general, they appear to support antitrust actions aimed at the biggest players, stating that “when monopoly gatekeepers are reined in, American innovation wins.”
Other Updates
Dutch ACM Given Investigative Powers
The Netherlands Senate has approved the Dutch Implementation Act, giving the Authority for Consumers and Markets (ACM) the powers to investigate compliance with the DMA. While national competition authorities can conduct research and support the Commission in investigations, the Commission has the sole power to enforce the law. However, as of March 10, 2025, the ACM now officially has the power to carry out investigative acts for reports about non-compliance with the DMA.
Apple Loses Appeal in Germany
Apple lost an appeal to the German antitrust authority, the Bundeskartellamt, not to be designated an “undertaking of paramount significance for competition across markets” under its competition regime, Section 19a GWB. This now means Apple must comply with the rules set by the authority, the first of which will likely include its investigation into Apple's App Tracking Transparency policy. The policy allows users to prevent apps from cross-tracking them. However, the concern here is that Apple does not present the same prompts for its first-party apps.
This means that while Apple maintains a wealth of first-party data, it does not offer users the same opportunity to prevent cross-tracking as the company does for third parties, which is self-preferencing. German competition law has some similarities to the DMA, particularly as many gatekeepers have also been designated as undertakings of paramount significance and may have some cross-over obligations like prohibiting self-preferencing. That said, the Bundeskartellamt can investigate and prohibit a wider range of activity than the DMA due to its “case-by-case examination of practices.”
Meta Backtracks on AI in EU
Much like Apple last year, Meta has announced that it will roll out artificial intelligence chatbots in Europe after initially stating that it would not due to regulation. The previous concerns were due to privacy rather than competition, given that the company was training its models on user-generated content. Meta AI will roll out across WhatsApp, Facebook, Instagram, and Messenger in the EU and won’t be trained on first-party data from users in the EU, reports Emma Roth for The Verge. This rollout might now subject the AI features to DMA regulation. According to a Commission policy brief, “generative AI-powered functionalities may be integrated or embedded in existing designated core platform services and therefore be covered by the DMA obligations.”
Google AI Overviews come to Europe
Despite an initial limited launch, Google will now launch “AI Overviews” in search to more countries, including in Europe. Competition lawyer Thomas Höppner pointed out the boldness of this launch, which came one week after the preliminary finding of DMA non-compliance on search, where the Commission found the company to be self-preferencing. He argues that there are DMA implications, as gatekeepers “need to provide providers of similar services with an equivalent opportunity to appear.” As Google is not offering competing AI services the opportunity to appear in a similar manner, its product is arguably non-compliant.
Brussels Effect in Japan and Brazil
Japan's Fair Trade Commission, the country’s antitrust enforcer, announced on March 31, 2025, that Apple and Google would both be designated under its new ex ante law, the Act on Promotion of Competition for Specified Smartphone Software. The law was passed in 2024, and
“aims to develop a competitive environment in which innovation by various entities is activated through competition and consumers can select and enjoy various services created by innovation, while ensuring security, etc. with respect to software particularly necessary for the use of smartphones (mobile operating systems (OS), application stores, browsers, and search engines).”
The outline document of the law says that the “EU has pioneered new regulations in this field,” and that this law aims to bring Japan “in lockstep to set fair competition practices for platform operators.” The obligations the law places on Apple and Google are similar to the DMA, for example, they must allow for third-party app stores, alternative payment methods to their proprietary in-app payment systems, remove anti-steering provisions, allow users to change default settings and browser engines, allow third parties interoperability with operating systems as well as data related obligations such as allowing for data portability and banning unfair data practices. Google and Apple have until December 18, 2025, to make changes to bring their companies into compliance.
In a similar move, Brazil’s competition enforcer, CADE, temporarily scored a win against Apple, ordering the company to allow alternative app stores, sideloading, and alternative payment methods. While the ruling has been paused on an appeal, the judge explicitly pointed out that Apple “has already complied with similar obligations in other countries.” Both of these cases illustrate that despite threats from the US, some countries are still choosing the European path.
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