EU ACCUSES APPLE AND GOOGLE OF VIOLATING DIGITAL MARKETS ACT

The European Commission has launched a landmark action accusing Apple and Google’s parent company, Alphabet, of breaching the EU’s Digital Markets Act (DMA). This move is likely to amplify tensions with former US President Donald Trump, who has previously warned of retaliatory tariffs against foreign companies in response to stricter European regulations targeting American technology firms.

The commission stated that Apple and Google’s actions potentially violate strict competition rules designed to promote fairness and transparency within the digital marketplace. Breaches of the DMA carry the possibility of fines amounting to 10 per cent of a company’s annual revenue or up to 20 per cent for repeat offences. For Apple, whose 2024 revenue reached $391 billion (£301 billion), this could amount to nearly $80 billion.

A preliminary investigation has found that Google’s search engine appears to favour its own services over those of competitors, undermining the principle of fair competition. Additionally, it was discovered that the Google Play app store imposes restrictions on developers, effectively blocking them from offering better deals outside of the Play ecosystem.

As for Apple, the European Commission has instructed the company to make its operating systems available to rival hardware manufacturers. This requirement aims to give competitors’ devices, such as smartphones and headphones, seamless compatibility with Apple products including iPhones and iPads. A second ruling has set out a timeline for Apple to grant third-party developers access to its closed systems, ensuring compliance with the DMA.

Apple has responded by criticising the commission’s orders, claiming they stifle innovation and harm users in the European market. The company argued, “These decisions wrap us in red tape, slowing down Apple’s ability to innovate for users in Europe and forcing us to give away our features for free to companies who do not have to play by the same rules.”

Google has similarly objected, stating that the changes required by the commission would not only complicate how search results are displayed but also diminish traffic to European businesses. Oliver Bethell, Google’s senior director for competition, added, “If we are unable to charge reasonable fees for Android and Play services, it will limit our ability to continue investing in an open platform.”

Despite pushback from the tech giants, EU competition chief Teresa Ribera emphasised that the regulations simply enforce the law and create market clarity for Apple, Google, and their competitors. The regulatory actions come months after the EU initiated proceedings to ensure compliance with its new competition framework, underscoring its determination to foster a fairer digital economy.

This high-stakes standoff between Europe and some of the world’s most powerful tech companies could signal deeper rifts in transatlantic relations, particularly as geopolitical tensions surrounding trade policies and digital taxation escalate.