Apple and Google in the hot seat as European regulators ignore Trump warnings

The European Commission is not backing down from efforts to rein in Big Tech. In a series of press releases today, the European Union's executive arm has announced actions against both Apple and Google. Regulators have announced that Apple will be required to open up support for non-Apple accessories on the iPhone, but it may be too late for Google to make changes. The commission says the search giant has violated the Digital Markets Act, which could lead to a hefty fine.

Since returning to power, Donald Trump has railed against European regulations that target US tech firms. In spite of rising tensions and tough talk, the European Commission seems unfazed and is continuing to follow its more stringent laws, like the Digital Markets Act (DMA). This landmark piece of EU legislation aims to make the digital economy more fair. Upon coming into force last year, the act labeled certain large tech companies, including Apple and Google, as "gatekeepers" that are subject to additional scrutiny.

Europe's more aggressive regulation of Big Tech is why iPhone users on the continent can install apps from third-party app markets while the rest of us are stuck with the Apple App Store. As for Google, the European Commission has paid special attention to search, Android, and Chrome, all of which dominate their respective markets.

Apple's mobile platform plays second fiddle to Android in Europe, but it's large enough to make the company subject to the DMA. The EU has now decreed that Apple is not doing enough to support interoperability on its platform. As a result, it will be required to make several notable changes. Apple will have to provide other companies and developers with improved access to iOS for devices like smartwatches, headphones, and TVs. This could include integration with notifications, faster data transfers, and streamlined setup.

The commission is also forcing Apple to release additional technical documentation, communication, and notifications for upcoming features for third parties. The EU believes this change will encourage more companies to build products that integrate with the iPhone, giving everyone more options aside from Apple's.

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Regulators say both sets of measures are the result of a public comment period that began late last year. We've asked Apple for comment on this development but have not heard back as of publication time. Apple is required to make these changes, and failing to do so could lead to fines. However, Google is already there.

Google could face billions in fines

Google made numerous changes to its sprawling network of online services and products in advance of the DMA's implementation. Yet, the European Commission says the company hasn't done enough. The latest ruling says that Google is still favoring its own products and services to an impermissible degree. The commission also claims Google has not done enough to steer users to cheaper offers outside of the Google Play platform.

When you search for anything on the Internet, there's a fair chance something that Google owns will appear in the results. The EU's investigation reportedly revealed Google products in shopping, hotel booking, transport, finance, and sports have been given preferential treatment at the expense of competitors. These items often appear at the top of search results or in dedicated spaces on the page in violation of the DMA, the commission says.

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The EU also takes issue with how Google is handling developers in Google Play. Under the DMA, Google is required to allow app makers to point users to other sources of their content. However, regulators have found that Google improperly blocks developers from doing this. They also allege that Google's fees on apps are too high under EU law.

This is just a preliminary finding—Google still has the chance to investigate and challenge the commission's findings. And you can bet it will. Google says today's action "will hurt European businesses and consumers, hinder innovation, weaken security, and degrade product quality." It is Google's view that the content it includes in search can net consumers greater savings and increase traffic to European businesses.

As for Google Play, Google claims its policies help reduce the spread of malware, pointing out that links outside its ecosystem lose the benefits of its robust security measures. It also takes issue with the EU's assessment of the fees it charges. The company says it cannot continue investing in Android and Google Play without what it calls "reasonable fees."

Nothing is set in stone yet, but if Google is found to be violating the DMA, it could be hit with a fine of up to 10 percent of its global revenue. This amount is doubled for repeat violations. Any final amount is difficult to predict now, but 10 percent of Google's 2024 revenue would be about $35 billion. Even for Google, this would be a big hit to the bottom line—its 2024 profit amounted to just over $100 billion.