Google, Apple brace for potential breakups amid global regulatory crackdown
Tech giants under fire: Major tech giants like Google and Apple are facing challenges as regulators in both the United States and Europe are intensifying their scrutiny over alleged anti-competitive behaviour.
This heightened scrutiny could potentially lead to unprecedented break-up orders for Apple and Alphabet’s Google, marking a shift in the tech industry.
Regulators in various countries are showing increased interest in investigating Big Tech following the initiation of antitrust probes by both the EU and the US. Since the breakup of AT&T 40 years ago, no company has faced the possibility of a regulator-mandated breakup in the US until now.
Both Google and Apple have expressed disagreement with the accusations levelled against them by regulators. Google has rebutted the EU’s allegations, while Apple has vehemently denied the claims made in the US lawsuit.
Closed ecosystems criticised
The current regulatory focus revolves around accusations that companies like Apple and Google have created closed ecosystems around their products, making it challenging for consumers to switch to competing services. This practice has led to the term “walled gardens” being coined to describe their business models.
The US Department of Justice has issued a warning to Apple, indicating that a breakup order could be a potential remedy to address concerns about monopolistic practices in the smartphone market. However, any resolution to these cases is likely to be protracted, with Apple indicating its intention to contest the allegations.
In Europe, additional scrutiny is anticipated, with Apple, Meta Platforms, and Alphabet potentially facing investigations for violations of the Digital Markets Act (DMA), which could result in substantial fines or even breakup orders for repeated breaches.
European regulators, led by Margrethe Vestager, have signalled a willingness to pursue drastic measures, such as requiring Google to divest some of its assets to address concerns about anti-competitive behaviour in its adtech business.
While the possibility of breakup orders looms, legal experts caution that such measures are not guaranteed. The complexity of Apple’s integrated ecosystem presents challenges compared to Google. Moreover, any decision to pursue structural remedies like breakups will likely face legal hurdles and court battles.
Ultimately, the outcome of these regulatory actions will have major implications for the tech industry, as regulators seek to promote competition, fairness, and innovation in digital markets.
(With Reuters Inputs)
