EU throws down gauntlet to Trump with Apple, Google rulings

EU throws down gauntlet to Trump with Apple, Google rulings

  • 20.03.2025 03:38
  • politico.eu
  • Keywords: Apple, Google

The European Commission has ordered Apple and Google to modify their products to comply with the EU’s Digital Markets Act, warning they face hefty fines if they fail to do so. The ruling could strain U.S.-EU relations, as President Trump has sought to protect American tech companies from what he views as unfair foreign regulations.

Alphabet ProductsApple ProductsAAPLsentiment_dissatisfied

Estimated market influence

Apple

Apple

Negativesentiment_dissatisfied
Analyst rating: Buy

The European Commission ruled that Apple may be in breach of the EU’s Digital Markets Act (DMA), requiring changes to their products such as giving competitors access to iPhone functionalities and altering communication with developers. This could lead to fines up to 10% of global revenues.

Google

Negativesentiment_dissatisfied
Analyst rating: N/A

The Commission found that Google needs to make further changes to its Play Store and Google Search service, potentially facing similar financial repercussions as Apple.

Context

Analysis and Summary: EU Rulings on Apple and Google

Key Rulings

  • Apple:

    • Must provide third-party developers access to iPhone functionalities (e.g., notifications, device-pairing) equal to its own devices like the Apple Watch.
    • Needs to overhaul communication with developers.
    • Failure to comply could result in fines up to 10% of global revenues.
  • Google:

    • Must stop promoting its own services over competitors in Google Search and Play Store.
    • Potential fines later this month, alongside other non-compliance rulings.

Competitive Dynamics

  • The EU’s actions signal a tougher stance on U.S. tech giants under the Digital Markets Act (DMA).
  • Transatlantic Tensions:
    • U.S. President Trump has vowed to protect American companies from "overseas extortion," citing the DMA as a potential battleground.
    • This could escalate trade and regulatory disputes between the EU and the U.S.

Market Implications

  • Regulatory Uncertainty:

    • The rulings set precedents for future enforcement of digital competition rules in the EU.
    • Could prompt other tech companies to reassess their business practices to avoid similar issues.
  • Impact on Innovation:

    • Critics argue the EU’s decisions may stifle innovation by limiting Apple’s control over its ecosystem.
    • Advocacy groups like European Digital Rights believe the measures don’t go far enough in ensuring fair competition.

Long-Term Effects

  • The rulings could reshape the global tech industry, encouraging greater interoperability and competition.
  • Global Trade Policy:
    • May influence other regions to adopt similar regulatory frameworks for Big Tech.
    • Could lead to a fragmented approach to digital regulation, with differing rules in the EU, U.S., and elsewhere.

Strategic Considerations

  • Corporate Strategy:

    • Apple and Google will likely invest significant resources to comply with DMA requirements while minimizing business disruption.
    • Companies may explore legal challenges or appeal processes to delay enforcement.
  • Public Perception:

    • The rulings could enhance the EU’s reputation as a global leader in competition regulation, attracting businesses and consumers.
    • May also foster goodwill among European developers and smaller tech firms.

Expert Opinions

  • Competition policy expert Joseph Van Coniglio predicts U.S. opposition to the EU’s DMA enforcement, aligning with a more mercantilist trade policy under Trump.
  • Dirk Auer of the International Center for Law & Economics describes the ruling as “micro-managing” Apple’s product strategy.

Conclusion

The EU’s rulings on Apple and Google mark a significant milestone in enforcing digital competition rules. While they may ease concerns about market dominance, the long-term effects on innovation, global trade, and corporate strategy remain to be seen.