Google disagreed with the EU’s charges, while Apple maintained that the legal and factual basis for the U.S. action was incorrect
Large tech companies like Google and Apple confront tough obstacles as European and American antitrust authorities crack down on purportedly anti-competitive behaviour. These businesses could face breakup orders, which would be a turning point in regulatory proceedings directed towards the tech sector.
This would encourage regulatory watchdogs everywhere to jump on board, as seen by the increasing number of antitrust investigations in different nations after the commencement of proceedings in the US and the EU. Until today, no American corporation has faced the prospect of a regulator-led breakup since AT&T, a Texas-based multinational telecommunications holding firm, was split up precisely 40 years ago.
Regulators Take Aim at Modern Monopolies
Google disagreed with the EU’s charges, while Apple maintained that the legal and factual basis for the U.S. action is incorrect.
AT&T, formerly known as Ma Bell, was divided into seven separate businesses in 1984 and dubbed “Baby Bells” to create one of the most potent monopolies of the twentieth century. The three companies that are still in business are Lumen, Verizon, and AT&T. The term “walled gardens” originated from regulators’ accusations that tech giants like Apple and Google have created impenetrable environments around their products that prevent users from switching to competitors’ services.
The US Department of Justice joined forces with 15 states to sue Apple for monopolising the smartphone market, impeding competitors, and inflating prices. It also cautioned the $2.7 trillion corporation that a breakup order is not precluded as a solution to restore competition.
Even yet, the case—which Apple has vowed to fight—will probably take years to decide. The United States’ measures follow other growing threats that have been made around Europe this week.
Big Tech Faces EU Scrutiny Under New Digital Markets Act
A reliable news source stated that Apple, Meta Platforms, and Alphabet will likely be investigated for possible violations of the Digital Markets Act (DMA), which could result in heavy fines and even breakup orders for repeated breaches. Big Tech will be under increased scrutiny soon.
When Margrethe Vestager, the head of EU antitrust, accused Google last year of engaging in anti-competitive behaviour in its lucrative ad tech division and hinted that the company would have to sell off its sell-side tools, she paved the path for severe action. She stated that to prevent Google from allegedly favouring its online digital advertising technology services over those of advertisers and online publishers. It appears that selling some of Google’s assets is the only practical approach to avoid conflicts of interest. Vestager is anticipated to make a definitive ruling by the end of the year.
Members of the European Parliament, Andreas Schwab, who had a major role in writing the historic EU DMA tech legislation that went into effect this month, stated that MEPs want strict measures taken against Big Tech companies that break the law. He said that if they did not comply with the DMA, then the Parliament would ask for a breakup. The ultimate objective is to create fair, open marketplaces that foster more innovation.
Fines More Likely Than BreakUp Orders
While they consider their options, authorities are far from guaranteed to issue breakup orders; instead, any action could end in a punishment. Law experts also hinted that, based on the Microsoft case from 1998, the case against Apple would be more challenging this time around.
A Commission official stated that in the European Union, splitting a company is seen as a last resort. This has never happened before. Damien Geradin, lawyer at Geradin Partners, a Belgium-based law firm representing several app creators in prior legal disputes with Apple, stated that compared to Google, Apple’s highly integrated system would likewise make a breakup challenging.
Many regulators are more likely to impose restrictions on Apple’s behaviour than break it up. Google’s break-up might concentrate on particular purchases. Break-ups are complicated and legally tricky, so expect solutions centred on better app store standards and Apple hardware access.