The U.S. has criticized the European Union for imposing substantial fines on Apple (AAPL) and Meta Platforms (META) for allegedly violating the Digital Markets Act (DMA). A White House spokesperson reacted to the fine levied yesterday, stating “This novel form of economic extortion will not be tolerated by the United States.” The fines could prompt new trade tensions between the U.S. and the EU, especially since President Donald Trump has vowed to penalize nations that target American companies with hefty tariffs.
The European Commission, the EU’s regulatory body, fined Apple $570 million and Meta $230 million, following a year-long probe. The DMA seeks to protect and promote smaller companies to compete effectively in the digital market. Notably, Apple and Meta are the first two companies to be fined under the DMA. The White House also called the DMA discriminatory for imposing the very first fines on American big tech firms.
The spokesperson also said that “Extraterritorial regulations that specifically target and undermine American companies, stifle innovation, and enable censorship will be recognized as barriers to trade and a direct threat to free civil society.” It remains to be seen what actions, if any, the Trump administration will take in response to these fines.
The Road Ahead for Apple and Meta
The Commission has granted Apple and Meta two months to comply with the regulatory requirements or face additional penalties. For Apple, this means eliminating the technical and commercial restrictions that prohibit app developers from offering competing deals outside of Apple’s App Store. Consequently, consumers would have the opportunity to download apps at cheaper rates from other channels. Plus, app developers would benefit from avoiding the hefty fees Apple charges for hosting apps on its platform.
Under the Commission’s radar is Meta’s “Pay or Consent” policy for Instagram and Facebook. The policy allows users the option to pay a monthly fee for ad-free experience or use the platforms for free but with personalized ads, which could also be collecting user data. Although Meta introduced a new version of its free personalized ad service in November 2024, the Commission is currently reviewing the new option regarding compliance with the DMA.
Is Apple a Good Stock to Buy Right Now?
Apple is scheduled to report its Q2FY25 earnings on May 1. Ahead of the results, analysts remain divided on Apple’s stock trajectory. On TipRanks, AAPL stock has a Moderate Buy consensus rating based on 19 Buys, 12 Holds, and three Sell ratings. Also, the average Apple price target of $239.45 implies 17% upside potential from current levels. Year-to-date, AAPL stock has lost 18.2%.
Is META a Good Stock to Invest in?
Wall Street remains highly bullish about Meta Platforms’ stock trajectory. The social media giant is set to release its Q1FY25 results on April 30. On TipRanks, META stock has a Strong Buy consensus rating based on 42 Buys, three Holds, and one Sell rating. The average Meta Platforms price target of $705 implies 35.5% upside potential from current levels. META stock has lost 11.1% so far this year.
