EU Warns Google of Massive Fine in First DMA Probe
Orders Apple to Open Up Its Ecosystem
The European Union (EU) is intensifying its crackdown on major U.S. technology companies (Big Tech). It has announced an astronomical fine against Alphabet, Google's parent company, for allegedly violating the so-called 'Big Tech Fairness Act,' the Digital Markets Act (DMA). Additionally, it has ordered Apple to open up the iPhone ecosystem to be compatible with all brand devices.
On the 19th (local time), according to Bloomberg and other sources, the EU Commission announced preliminary investigation results stating that Alphabet's Google Search and Google Play violated the DMA.
This is the first time the Commission has announced investigation results since the DMA was implemented in March last year.
In the preliminary investigation results, the Commission judged that Google Search violated DMA regulations by engaging in so-called 'self-preferencing'?favoring its own services in search results related to airline tickets, hotel bookings, and more. Google Play was pointed out for technically restricting external app developers from guiding users to cheaper purchase options or alternative payment methods.
Alphabet can respond to the preliminary results. If the preliminary findings are finalized as legal violations, a massive fine amounting to up to 10% of global revenue will be imposed.
However, the Associated Press reported that authorities prefer to negotiate with Alphabet to ensure compliance with the DMA rather than impose fines. Teresa Rivera, Vice President of the EU Commission, said, "Our main focus is to create a culture of DMA compliance."
The Commission adopted a separate DMA decision against Apple. It instructed Apple to improve 'interoperability' so that iPhones and iPads can be compatible with smartwatches, headphones, TVs, and other devices from different brands to comply with the DMA. For example, this means opening the ecosystem so that Samsung's Galaxy Watch can connect to an Apple iPhone. Apple is well known for its closed ecosystem.
The Commission stated, "Improving interoperability will provide developers with a more open environment, offer European consumers more choices, and promote the launch of innovative products and services."
Unlike the preliminary investigation into Google’s DMA violations, this decision does not immediately impose fines. However, since it is legally binding, failure to comply with the directives in the future will subject Apple to violation investigations like Google.
Apple issued a statement saying, "The Commission's decision unnecessarily ties us up in regulation," and "It forces us to give away new features we developed for free to competitors who are not subject to regulation."
The DMA is a law that designates seven platform operators as 'gatekeepers' and regulates them to prevent abuse of market dominance by major platform operators. Among the seven operators, including Alphabet, Amazon, Apple, Meta, and Microsoft (MS), five are U.S. companies.
Former U.S. President Donald Trump had previously threatened retaliation against EU regulations targeting U.S. Big Tech. U.S. Vice President JD Vance also criticized the EU's Artificial Intelligence (AI) law. Bloomberg noted, "This risks further escalating tensions with President Trump."
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