The European Commission announced that American tech companies Apple and Google-owner Alphabet are found to be in violation of the European Union’s digital regulations, which target anti-competitive practices.
While Alphabet has made changes to Google Search to resolve the issue, the Commission said the company continues to “self-preferences its own services over those of third parties,” such as services related to shopping, hotel booking, and transport.
The European Commission’s second issue with Alphabet is that the company has reportedly failed to comply with the DMA’s “steering rules” for Google Play.
DMA requires that app developers that distribute apps through Google Play can freely “steer” or direct customers to other sales channels for better offers, according to the press release. Developers should be able to do this free of charge.
The Commission found that “Alphabet technically prevents certain aspects of steering, for instance, by preventing app developers from steering customers to the offers and distribution channels of their choice.”
Developers pay Alphabet to facilitate the initial acquisition of a new customer through Google Play. The Commission found that the fees charged “go beyond what is justified.”
“Alphabet charges developers a high fee over an unduly long period of time for every purchase of digital goods and services,” it said.
“The first set of measures concerns nine iOS connectivity features, predominantly used for connected devices such as smartwatches, headphones or TVs,” the Commission said.
“The measures will grant device manufacturers and app developers improved access to iPhone features that interact with such devices (e.g. displaying notifications on smartwatches), faster data transfers (e.g. peer-to-peer Wi-Fi connections, and near-field communication) and easier device set-up (e.g. pairing).”
The second set of measures is aimed at improving transparency and effectiveness related to the process Apple has established for developers requesting interoperability with iPhone and iPad features.
This includes setting up a more predictable timeline for reviewing such developer requests, better access to documentation regarding features not yet available to third parties, and timely communication.
The European Commission’s decision on Alphabet and Apple could trigger tensions with the Trump administration.
Foreign governments that levy digital services taxes and fines or impose certain policies and practices on American companies may be met with “responsive actions like tariffs.”
“Regulations that dictate how American companies interact with consumers in the European Union, like the Digital Markets Act and the Digital Services Act, will face scrutiny from the Administration,” the fact sheet reads.
The Trump administration also intends to review whether any policy of the EU or the UK leads to American companies being forced to impose censorship and undermine free speech.
Company Response, Fines
Google criticized the European Commission’s decision against Alphabet, warning in a March 19 statement that the move “will hurt European businesses and consumers, hinder innovation, weaken security, and degrade product quality.”The Commission’s findings require Google to change how it shows certain types of search results, making it harder for people in the region to find what they are looking for, which would potentially affect European businesses negatively by reducing traffic, Google said.
The decision regarding Google Play risks exposing customers to “malware and fraud from bad apps,” according to the statement.
Google argued that it charges “reasonable fees” to developers. This is done to support the development of Android and Google Play. Being prevented from doing so could lead to the company being unable to “invest in an open platform that powers billions of phones around the world.”
Apple said the EU order helps its rivals and harms users.
“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,” the company said in an emailed statement to Reuters.
“It’s bad for our products and for our European users. We will continue to work with the European Commission to help them understand our concerns on behalf of our users.”
The Epoch Times reached out to Apple for comment but did not receive a response by publication time.
The European Commission has sent its preliminary findings to Alphabet. The company can examine the documents and has the right to defend itself.
If the findings are confirmed by the Commission, it “would adopt a non-compliance decision,” potentially leading to fines of up to 10 percent of the company’s total global annual turnover.
For Apple, the measures outlined by the Commission are “legally binding,” and the company is required to implement them.
Alphabet made around $350 billion in revenues last year. A 10 percent fine would essentially mean the company will be obliged to shell out $35 billion. For Apple, the same fine would come to around $39.1 billion, with the company earning roughly $391 billion in 2024.
Last month, U.S. House Judiciary Committee Chairman Jim Jordan (R-Ohio) wrote to Ribera, raising concerns that the DMA “may target American companies” and criticizing the 10 percent fine rule.
“These severe fines appear to have two goals: to compel businesses to follow European standards worldwide, and as a European tax on American companies,” Jordan wrote in the letter.
“These, along with other provisions of the DMA, stifle innovation, disincentivize research and development, and hand vast amounts of highly valuable proprietary data to companies and adversarial nations.”
