The EU has taken action against Google and Apple for violating the DMA. President Trump has referred to the EU’s regulatory actions as unfair towards American tech companies and has made threats of retaliation against them.
The Digital Markets Act (DMA) was implemented by the EU to promote fair competition within the digital sector. The act identifies large tech companies referred to as “gatekeepers” and imposes obligations on these companies to prevent market monopolization practices.
After the DMA took effect a year ago, the EU’s executive commission quickly launched investigations into several Big Tech companies like Meta, Alphabet Inc. Apple and many more.
The investigation into these companies and the potential for any of them to get hit with a fine depending on the results of the investigation led Mark Zuckerberg, the CEO of Meta platforms to threaten the EU with presidential interference.
The CEO did his best to align himself with the Trump administration following Trump’s victory, perhaps so he could name-drop the president in unfavorable situations.
Zuckerberg also openly criticized the EU’s fines on US tech firms, saying that they were similar to tariffs that undermine the lead America has in the technology industry.
Despite the pushback, the EU continued its investigation into these tech companies and has, for the first time, moved to impose the Digital Markets Act.
The EU fines Google and Apple
Recent investigations by the EU’s executive commission have revealed that both Google and Apple have violated the DMA regulations.
The European Commission, the bloc’s executive arm, charged Google’s parent company, Alphabet Inc., with breaking the Digital Markets Act.
The company has been charged with favoring its own services in search results and restricting app developers from directing consumers to alternative purchasing channels outside the Google Play Store. These practices are regarded as clear attempts at monopolizing the market and manipulating consumer choice.
Google responded to the charge by saying that the result of the EU’s investigation will require the company to make even more changes to how it displays some search results, “which would make it harder for people to find what they are looking for and reduce traffic to European businesses. This is, quite simply, misguided.”
Alphabet Inc. is facing fines of up to 10% of its global revenue or 20% of its global revenue if the EU discovers another DMA violation.
Apple has also been ordered to open its iOS operating system to enhance interoperability with third-party devices and applications, such as smartwatches or headphones from other brands. Opening up its operating system would also prevent Apple from being able to unfairly limit competitors’ access to essential technologies.
“Our main focus is creating a culture of compliance,” Teresa Ribera, the EU’s antitrust chief said in a statement about the DMA’s move against Google. When asked about the action against Apple, she called it an “important step” toward opening its ecosystem.
Last year, Apple was fined €2.4B which is about $2.6B for abusing its power to squash rival search shopping services. The company then lost a court bid to get the fine overturned.
Apple has previously accused Meta of attempting to gain access to its sensitive features as the EU attempts to open up its iPhone and iPad operating systems. The company stated that the move would raise “concerns about the privacy and security of users.”
While the order on Apple’s operating system cannot lead immediately to fines, the commission could take further steps under the DMA including financial penalties if the company refuses to comply.
“Today’s decisions wrap us in red tape,” Apple said in a statement about the EU’s order. “It’s bad for our products and for our European users.”
The EU has scrutinized Apple over how its App Store complies with the DMA. The California-based company is expected to be hit with a fine in the coming weeks for allegedly interfering with several attempts by developers to offer cheaper subscriptions away from the App Store. The company was previously hit with a €1.8B fine for a similar practice.
Meta, another company under scrutiny from the EU, is also poised to receive a decision over making its users subscribe for ad-free access to Facebook and Instagram.
Political tensions between the EU and America
The DMA has so far targeted seven companies since its inception. These companies have been identified to be the internet’s “gatekeepers.” They include tech giants like Alphabet Inc., Google’s parent company, Amazon, Apple, Booking.com, TikTok’s parent company ByteDance, Meta and Microsoft.
The DMA has gone after these companies with regulations meant to boost competition with smaller rivals and give consumers more choices. The DMA has been criticized heavily, with many alleging the regulations are too restrictive and targets US companies to stifle innovation.
President Trump vowed to protect the American technology industry from fines that amount to “overseas extortion” which of course includes the fines leveled on any big tech company under the DMA.
In a letter addressed to Teresa Ribera, house judiciary committee chair Jim Jordan, shared his concerns about the digital markets act.
“We write to express our concerns that the DMA may target American companies, and we request a briefing to understand the commission’s approach to enforcing the DMA,” the letter, co-signed by antitrust subcommittee chair Rep. Scott Fitzgerald, said.
Jordan went on to point out that six of the seven companies identified as “gatekeepers” are American firms and argued that the DMA would “benefit Chinese and European companies that are not subject to the regulations.”
Jordan also stated in his letter that the intent of another law, the digital service’ act, was to “censor political speech both in and outside the United States.”
The US president is considering imposing tariffs on countries that levy digital services taxes against American companies. Trump stated in a memo circulated in February that he would look into taxes and regulations or policies that “inhibit the growth” of US corporations operating abroad.
The president has also repeatedly criticized the bloc’s antitrust fines, equating them to tariffs against the US. He imposed 25% tariffs on steel and aluminum in retaliation and has stated that the US will respond to the EU’s countermeasures against the tariffs.
Any future EU fines are likely to be considered provocations by the White House.
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