EU skewers Google and Apple over breaking tech rules, risking Trump showdown

EU skewers Google and Apple over breaking tech rules, risking Trump showdown

  • 20.03.2025 10:04
  • forbesindia.com
  • Keywords: EU, Google

The European Union fined Google for search engine bias and restricted Apple's iPhone interoperability under the Digital Markets Act, risking tensions with the U.S. over tech regulation disputes.

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Estimated market influence

Google

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Analyst rating: N/A

The EU found that Google's search engine and Play Store practices harm competition.

Apple

Apple

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Analyst rating: Buy

Ordered to improve compatibility with rival devices, impacting their ecosystem control.

Context

Analysis of EU's Actions Against Google and Apple Under DMA

Key Facts

  • Digital Markets Act (DMA): The EU enforced the DMA, compelling major tech firms to open up competition in the 27-country bloc.
  • Google Allegations:
    • Accused of favoring its own services over rivals in search results.
    • Play Store restrictions on developers redirecting users to external deals.
  • Potential Fines: Up to 10% of global turnover for violations, rising to 20% for repeat offenders.
  • Apple Order: Required to enhance iPhone compatibility with rival devices (e.g., headphones, smartwatches).
  • EU-US Tensions: Risk of retaliation from the US, particularly under Trump's administration.

Market Implications

  • Increased Competition: DMA aims to level the playing field by forcing tech giants to share ecosystems and APIs.
  • Consumer Choice: Enhanced interoperability could lead to better choices and lower prices for consumers.
  • Innovation Hurdles: Critics argue that regulations may stifle innovation and harm security.

Competitive Dynamics

  • Tech Giants' Pushback: Both Google and Apple criticized the EU's decisions, claiming they would harm businesses and consumers.
  • US Tech Lobbying: Companies like Meta and X (Elon Musk) have aligned with Trump to counter EU regulations.
  • Global Trade Risks: Potential US tariffs or trade restrictions in response to EU tech laws.

Long-term Effects

  • Regulatory Precedent: DMA sets a framework for future competition cases, potentially influencing other regions.
  • Ecosystem Fragmentation: Rules may disrupt existing tech ecosystems but could also encourage new entrants.

Regulatory Landscape

  • Enforcement Power: The EU can impose significant fines and mandate structural changes to comply with DMA.
  • Security vs. Competition: Balancing user security and privacy against fostering competition remains a key challenge.

Strategic Considerations

  • Global Reputational Risk: US companies face backlash for perceived anti-EU stances, potentially harming international relations.
  • Adaptation Costs: Compliance with DMA may require substantial investments in infrastructure and legal resources.

Risks of US Retaliation

  • Trade Tensions: Trump's threats of tariffs could escalate into broader trade disputes, affecting transatlantic commerce.
  • Tech Industry Influence: Big Tech's political lobbying in the US may intensify to counter EU regulations.