Google and Apple found in violation of EU law

Google (GOOGL+2.90%) and Apple (AAPL+1.26%) on Wednesday were found in violation of the European Union’s landmark antitrust law, the European Commission, the EU’s executive body, said in two press releases on Wednesday.

Google and Alphabet were hit over the Digital Markets Act, a landmark European antitrust law that addresses anti-competitive practices in the tech industry and has been targeting the top big tech companies since its passing in 2022.

Both Apple and Google-parent company Alphabet are classified as “gatekeepers” under the act, along with other tech giants like Amazon (AMZN+1.34%), Tiktok-owner ByteDance, Meta (META+1.10%), and Microsoft (MSFT+1.32%).

Alphabet was designated a gatekeeper over its Google Search and Google Play functions, whereas Apple was designated over its iPadOS operating system for tablets.

The White House has been notably upset about the ongoing European crackdown on American big tech companies, with President Donald Trump issuing a directive threatening to impose tariffs on Europe to defend these companies from what he believes are “overseas extortion and unfair fines and penalties.”

European Union regulators sent two sets of preliminary findings to Google-parent Alphabet. The first accuse Alphabet’s Google Search engine of treating the company’s own services like shopping, hotel booking, transport, or financial results more favorably than rival ones by ranking them higher up in search results, or on dedicated spaces.

The second accuses the company’s app marketplace Google Play of preventing app developers from “freely steering consumers to other channels for better offers,” and by charging developers high fees over acquisition of new customers via their platform.

Google now has the time to defend itself, but if found guilty, could be fined up to 10% of its worldwide revenue.

The Commission also outlined a set of measures that Apple needs to abide with, requesting the iPhone maker to comply with “interoperability obligations” that enable seamless communication between different products and ecosystems.

“Today’s decisions mark the first time the Commission outlines concrete measures for a gatekeeper to comply with the Digital Markets Act,” EU vice-president for clean, just and competitive transition Teresa Ribera said in the Commission’s press release.

The EU is specifically asking Apple to make sure its product ecosystem is able to seamlessly integrate with third-party products like smartwatches, headphones, or TVs, and to increase transparency for app developers interested in having their apps be interoperable on Apple products. European app developers can currently send requests for additional interoperability through a portal Apple created in response to the DMA.

“The EU puts innovation and choice at the centre of its policies. Interoperability is one of the most important tools in making this happen,” EU executive vice president for tech sovereignty, security and democracy Henna Virkkunen said.

Apple said it has been cooperating with the Commission to comply with the DMA, but objects to the requests made on Wednesday.

“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,” Apple said in a statement to Quartz, adding that the results would effectively have third parties interfering with the design of future Apple products like iPhones.

“We will continue to work with the European Commission to help them understand our concerns on behalf of our users,” Apple said.

If the iPhone maker fails to comply with the order, it can face an investigation and a potential fine.

The EU launched the investigation into Apple and Google, as well as Facebook, in March 2024. The Commission then sent preliminary findings to Apple in June 2024 over its App Store fees and restrictions for app developers.