EU Cracks Down on Google and Apple

Europe's antitrust regulators have stepped up their crackdown on Big Tech, issuing preliminary charges against Google and an order to Apple, Reuters reports. This follows threats from US President Donald Trump to impose tariffs on countries that impose fines on American companies.

The European Commission, the EU's executive branch, has been investigating Google and Apple since last March, focusing on their compliance with the Digital Markets Act (DMA), which aims to curb the power of large tech companies.

On Wednesday, the Commission issued preliminary charges against Google, confirming a Reuters report from February 21. The charges focus on two areas: Google's practices on its app store, Google Play, and its alleged favoring of its own services, such as Google Shopping, Google Hotels, and Google Flights, over competitors.

Regarding Google Play, the Commission alleges that Google prevents app developers from freely steering consumers to other channels for better offers, and that its service fee for facilitating initial customer acquisition is excessive.

In the second charge, the Commission claims that Google prioritizes its own services over competitors in Google Search results.

EU Competition Commissioner Teresa Ribera stated, "These measures ensure that Alphabet abides by EU rules when it comes to two services widely used by businesses and consumers across the EU, Google Search and Android phones."

Google has pushed back against these charges, arguing that the EU's competition rules are harming consumers and businesses. Oliver Bethell, Google's senior director for competition, said in a blog post, "The Commission's findings require us to make even more changes to how we show certain types of Search results, which would make it harder for people to find what they are looking for and reduce traffic to European businesses."

Google has also argued that it cannot invest in an open platform if it cannot charge reasonable fees to support the ongoing development of Android and Play services.

The Commission has also issued two orders to Apple, requiring it to open up its ecosystem to rivals. The first order mandates that Apple provide rival makers of smartphones, headphones, and virtual reality headsets access to its technology and mobile operating system, enabling seamless connectivity with iPhones and iPads.

The second order sets a timeline for Apple to respond to requests from app developers for interoperability with other systems.

Apple has argued that the EU's order will hurt users and benefit its competitors. The company stated in an email, "Today's decisions wrap us in red tape, slowing down Apple's ability to innovate for users in Europe and forcing us to give away our new features for free to companies who don't have to play by the same rules."

If found guilty of breaching the DMA, Google could face fines of up to 10% of its global annual sales. Apple, if it fails to comply with the Wednesday order, could face an investigation and potential fines.

Alphabet's shares rose 1% on Wednesday, while Apple's shares rose 1.6%.