BRUSSELS/WASHINGTON- The White House said on Wednesday that fines on Apple and Meta Platforms by the European Union were a "novel form of economic extortion" that the United States will not tolerate.

The White House on Wednesday called the legislation, the Digital Markets Act (DMA), discriminatory.

"This novel form of economic extortion will not be tolerated by the United States," a White House spokesperson said.

"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."

The fines are "proportionate", an EU spokesperson said on Wednesday, reacting to views that they were modest.

"On the fines, are they modest, are they high ? From our point of view, they are proportionate (...) also to the duration and the gravity of the infringement," he said during a briefing.

EU on Wednesday imposed fines totaling 700 million euros ($798.7 million) on American tech giants Apple and Meta, a move expected to intensify already strained transatlantic trade relations.

Apple received a 500-million-euro fine for preventing app developers from informing users about alternative purchasing options outside its App Store, violating the EU's Digital Markets Act (DMA) anti-steering provisions, according to the Commission.

Apple's rules hindered developers from fully benefiting from external distribution channels and restricted consumers from accessing potentially cheaper offers available outside the App Store, the Commission said in a statement.

Meta, the parent company of Facebook and Instagram, was fined 200 million euros over its "Consent or Pay" model introduced in 2023. Under the system, EU users were required to either consent to the use of their personal data for targeted advertising or pay a monthly subscription fee for an ad-free experience.

The Commission found that the model failed to provide users with a genuine, less data-intensive alternative and did not sufficiently uphold their right to freely consent to the processing of personal data.

The EU's decision marks the first enforcement action under the bloc's landmark regulation, giving both companies 60 days to comply or face periodic penalty payments.

Big tech cries foul, consumers applaud

Apple responded in a statement, accusing the European Commission of unfair targeting. The company argued that the decision was detrimental to user privacy, product security, and innovation.

It claimed to have spent "hundreds of thousands of engineering hours" and made multiple changes in efforts to comply with the law, while accusing the Commission of shifting goalposts "every step of the way."

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Meta pushed back strongly against the ruling, accusing the EU of attempting to "handicap successful American businesses."

"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," Joel Kaplan, Meta's chief global affairs officer, said in a statement.

The Computer and Communications Industry Association (CCIA), which includes both Apple and Meta as members, echoed the criticism, calling the Commission's enforcement "opaque and discretionary," and warning that the DMA risks becoming politicized.

In contrast, consumer rights advocates welcomed the penalties. Agustin Reyna, director general of BEUC, Europe's leading consumer organization, praised the DMA as a "gamechanger" for digital market competition.

"Apple and Meta have had ample time to comply with the DMA but instead have delayed compliance and tried to twist the rules to their advantage," Reyna said. "Consumers deserve better choices, and businesses need fairer market conditions."

Fines amid trade tensions

While the fines are notable, they remain well below the DMA's cap of 10 percent of global annual turnover. Apple posted 391 billion dollars in revenue in its last fiscal year, while Meta earned 165 billion dollars in 2024. EU officials stressed that the 10-percent figure serves as a maximum ceiling and that the fines reflected the relative newness of the regulation and the short duration of the offenses.

Although Brussels has denied any link between the fines and broader US-EU trade tensions, analysts say the timing and moderation of the penalties may be politically motivated. The Commission reportedly delayed the announcement, originally expected in March, to avoid escalating tensions.

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Giorgos Verdi, a policy fellow at the European Council on Foreign Relations, said the political timing of the decision matters, noting that US President Donald Trump views EU tech regulation as "overseas extortion."

In February, the White House warned in a memo that it would consider retaliatory measures if EU regulators targeted American tech firms under the DMA or the Digital Services Act (DSA), a law focused on policing online content and disinformation.

More enforcement on horizon

Alphabet's Google and Elon Musk's social media platform X are reported to be next in line for potential penalties.

In July 2024, X was found in preliminary breach of the DSA for deceptive interface design and limited transparency, but no fine has been issued yet, prompting speculation that the delay is due to Musk's ties with Trump.

Meanwhile, pressure is mounting from European lawmakers. The Socialists and Democrats (S&D), the European Parliament's second-largest political group, urged the Commission to conclude investigations into potential breaches by companies including X and Meta.

"As S&Ds, we are determined to defend our European legislations. We will not water down our digital laws to appease those who wage trade wars," said the political group on social media X.

European Commission President Ursula von der Leyen indicated earlier this month that the EU is prepared to impose levies on US digital firms if trade talks with Washington collapse.

In an interview with POLITICO last week, von der Leyen emphasized that tech giants should expect strict enforcement of EU rules regardless of ownership or national origin.

"The EU's digital regulations have now become inevitably geopolitical," Verdi said. "Europeans are in need of a more comprehensive approach to safeguard their technological sovereignty in a Trumpian era."