The US-Europe trade war continues: Europe takes action against Google and Apple

The EU ignores Trump's threats, and Google and Apple face the risk of hefty fines.

According to reports, the European Commission is taking action on Wednesday to investigate Google and Apple under the Digital Markets Act. Preliminary findings from the European Commission indicate that Google's search engine may favor its own services and restrict developers from directing consumers to offers outside its app store. Apple has been asked to open its operating system to be compatible with connected devices from other brands. Companies that violate the Digital Markets Act face fines of up to 10% of their global revenue.

Despite previous threats from the Trump administration to retaliate against the EU's regulation of American tech companies, the EU remains steadfast in its position. According to a memorandum released last month, Trump is considering imposing tariffs on countries that levy digital services taxes on American companies. He stated that he would investigate taxes, regulations, or policies that hinder the growth of American businesses abroad.

EU Commissioner for Competition Teresa Ribera stated:

Companies operating in the EU, regardless of where they are registered, must comply with EU rules, including the Digital Markets Act. These decisions are simply the enforcement of the law.

Google faces the risk of a 10% global revenue fine

The European Commission has accused Google's parent company Alphabet of violating the Digital Markets Act. According to preliminary findings, regulators are concerned that Google's search engine favors its own services over competitors, despite a series of changes Google has made to its search services. Additionally, regulators are worried that Google stifles competition by making it difficult for developers to "guide" consumers to services outside its app store.

Companies that violate the Digital Markets Act face fines of up to 10% of their global revenue, and for repeat offenders, fines could double to 20%.

Google responded that the Commission's decision "will harm European businesses and consumers, hinder innovation, weaken security, and reduce product quality." It added that changes to Google Search requirements will "make it harder for people to find the content they are looking for and reduce traffic to European businesses."

Apple forced to open its ecosystem

On the same day, the European Commission also ordered Apple to open its operating system more to connected devices from other brands, such as smartwatches or headphones. Although Apple has made several concessions to the EU to avoid regulatory action, this decision may further compel the company to open its iOS operating system in Europe.

While the decision against Apple will not immediately lead to fines, if the company refuses to comply, the Commission can take further action under the Digital Markets Act, which could ultimately result in economic penalties.

Apple stated that the EU "binds us with red tape, slowing down Apple's ability to innovate for European users and forcing us to provide new features for free to companies that do not have to comply with the same rules. This is detrimental to our products and European users."

Starting next week, due to statutory deadlines for several investigations into Apple, Meta, and Google, the EU will face more sensitive decisions. These investigations could lead to immediate fines and may escalate tensions across the Atlantic in the increasingly intensifying trade war Risk Warning and Disclaimer

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