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Google, Apple hit by EU regulatory crackdown

Google, Apple hit by EU regulatory crackdown

  • 20.03.2025 06:55
  • thehindu.com
  • Keywords: Google, Apple

Google and Apple face EU antitrust actions over alleged Digital Markets Act violations. Google is charged with restricting app developer practices and favoring its services, while Apple must allow rivals to connect with iPhones and iPads.

Apple ServicesAAPLsentiment_dissatisfied

Estimated market influence

Google

Negativesentiment_dissatisfied
Analyst rating: N/A

Google was charged with breaching EU Digital Markets Act, potentially leading to fines and regulatory changes affecting its market position.

Apple

Apple

Negativesentiment_dissatisfied
Analyst rating: Buy

Ordered to allow rivals to connect with iPhones and iPads, which could reduce their competitive advantage and face potential fines.

Context

Business Insights and Market Implications

Key Facts and Data Points

  • Timeline:

    • Investigation began: March 2024
    • Regulatory actions published: March 20, 2025

  • Google Charges:

    • Two DMA violations:
      1. Restricting app developers from directing users to alternative channels for better offers.
      2. Favoring its own services (e.g., Google Flights, Google Shopping) over competitors in search results.

  • Apple Orders:

    1. Allow rival smartphone, headphone, and VR headset makers to connect seamlessly with iPhones and iPads.
    2. Set timeline for interoperability between Apple systems and third-party apps.

  • Financial Risks:

    • Google could face fines of up to 10% of global annual sales if found guilty.
    • Apple may face investigation and potential fines for non-compliance.

  • Share Prices:

    • Alphabet: +1% at 1540 GMT.
    • Apple: +1.6%.

Market Trends and Business Impact

  • Regulatory Crackdown Intensifies:

    • The EU's enforcement of the DMA signals a broader shift toward curbing Big Tech dominance.
    • U.S. President Trump's tariff threats did not deter the Commission, indicating global regulatory momentum against tech giants.

  • Competitive Dynamics:

    • Google and Apple face pressure to open their ecosystems, potentially benefiting smaller competitors and developers.
    • Rivals may gain access to proprietary technologies, fostering innovation but also raising concerns about fair competition.

Strategic Considerations

  • Google's Pushback:

    • Argues that EU rules harm consumers and businesses by limiting search result diversity and reducing platform investment.

  • Apple's Concerns:

    • Warns that the orders will slow innovation and disadvantage European users, while giving rivals free access to new features.

Long-Term Effects

  • Potential Market Shifts:

    • Forced interoperability may reduce barriers to entry, encouraging competition in app ecosystems and device connectivity.
    • Could lead to a more fragmented tech landscape, with companies like Google and Apple facing greater scrutiny globally.

  • Regulatory Impact:

    • Sets precedent for other regions (e.g., U.S., Asia) to adopt similar measures against Big Tech.
    • May influence corporate strategies, with tech firms re-evaluating compliance costs and innovation priorities.

Conclusion

The EU's actions against Google and Apple underscore a growing global trend of regulating Big Tech to promote competition and consumer choice. While the immediate impact may be financial and operational for these companies, the long-term implications could reshape industry dynamics and regulatory frameworks worldwide.