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Apple Set to Avoid EU Fine Over Browser Options on iPhones

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Apple is expected to avoid a possible fine and an order from the European Union regarding its browser options on iPhones, following changes made to comply with the EU’s landmark Digital Markets Act (DMA), according to sources familiar with the matter. The European Commission, which launched an investigation in March 2024, is anticipated to conclude its probe early next week.

EU Investigation and Browser Design Concerns

The European Commission had raised concerns over Apple’s design of the web browser screen on iPhones, specifically questioning whether it hindered users from switching to alternative browsers or search engines. The investigation, part of the broader effort to regulate Big Tech, has focused on how Apple’s design practices might impact competition in the digital market.

Closing of Investigation and Regulatory Action

Sources indicate that the European Commission is set to close the investigation soon, with no penalties expected for Apple. This follows the company’s recent changes aimed at addressing the concerns raised under the DMA, a regulation designed to ensure fair competition in the digital market. The DMA aims to make it easier for consumers to switch between competing online services, such as browsers and app stores, while also allowing smaller rivals to have a fairer chance to compete.

Context of EU Regulations

The DMA outlines strict guidelines for Big Tech companies, with fines reaching as much as 10% of a company’s global annual sales for violations. In addition to this case, the European Commission is expected to announce fines for Apple and Meta Platforms in other separate cases involving violations of the DMA. Apple faces scrutiny over restrictions that prevent app developers from informing users about offers outside its App Store for free. Meanwhile, Meta’s case concerns its paid subscription service, which critics argue should offer free alternatives.

Broader Impact on Big Tech

This development comes amid ongoing tensions between the EU and the U.S., especially with U.S. President Donald Trump threatening tariffs against countries that impose fines on American companies. The European Commission has declined to comment on these investigations.

Meituan’s Revenue in Line with Estimates Amid Sluggish Consumption and Rising Competition

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Meituan, China’s largest food delivery company, posted fourth-quarter revenue that met analysts’ expectations, despite the ongoing sluggishness in Chinese consumption. The company reported revenue of 88.5 billion yuan ($12.21 billion) for the three months ending December, just above analysts’ forecast of 87.7 billion yuan, according to LSEG data.

For the full year, Meituan’s revenue reached 337.59 billion yuan, a significant increase from 276.75 billion yuan in 2023. Its net profit surged to 35.81 billion yuan, up from 13.86 billion yuan the previous year, signaling robust growth despite broader economic challenges.

The company highlighted its strategic focus on expanding investments in cutting-edge technologies, including artificial intelligence, unmanned aerial delivery, and autonomous delivery vehicles. These initiatives are aimed at strengthening its position in the highly competitive food delivery market.

Meituan has benefited from an increased focus on low-cost and discounted products, catering to price-conscious shoppers. However, competition in the sector is heating up, particularly with e-commerce giant JD.com entering the food delivery space in February. JD.com announced it would provide full-time delivery riders with social insurance and housing fund contributions under China’s social security system, prompting Meituan to follow suit. Meituan plans to extend similar benefits to its full-time and stable part-time riders starting in the second quarter of 2025.

“As the industry leader, we are also dedicated to fulfilling our social responsibilities by creating employment opportunities and improving courier welfare,” Meituan stated in its earnings report.

PDD Holdings Faces Revenue Miss Amid China Competition and Global Uncertainty

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PDD Holdings, the parent company of Pinduoduo and Temu, reported lower-than-expected quarterly revenue on Thursday, reflecting weak consumer demand in China despite deep discounts and government efforts to boost spending. The company generated 110.61 billion yuan ($15.3 billion) in revenue for the quarter ending December 31, missing analysts’ estimates of 115.38 billion yuan. However, it exceeded profit expectations with an adjusted earnings per share of 20.15 yuan, aided by higher investment income and favorable currency exchange rates.

Despite aggressive pricing, PDD faces intense domestic competition from Alibaba and JD.com, both of which recently posted better-than-expected earnings. Analysts suggest that Alibaba’s focus on merchant retention and JD.com’s strength in electronics—bolstered by government subsidies—have given them an edge over PDD.

Internationally, PDD’s Temu platform continues to gain traction, attracting budget-conscious shoppers in markets like the U.S. and Europe. However, it faces uncertainty due to potential changes in the U.S. de minimis policy, which currently exempts imported items under $800 from tariffs. A policy shift could impact Temu’s low-cost advantage.

Co-CEO Chen Lei acknowledged the growing challenges posed by competition and regulatory shifts, stating that PDD is exploring new business models and localized supply chain innovations to adapt. Despite these concerns, U.S.-listed shares of PDD rose 2% in early trading.