Europe wants Apple, Google, and other technology companies to open up to competition. Otherwise, they face huge fines

Such a rollercoaster, which the investors had to deal with after electing Donald Trump as the new American president, was probably awaited by few. The risk of trade duties, introduced by the Republican administration, could trigger a recession. That's why the value of the largest technology companies has decreased. The stocks from the so-called magnificent seven, which includes brands like Apple, Google and Meta, have been gradually losing in recent weeks.

Apple is defending against competitive technologies

The next blow now comes from the old continent. The European Commission has ordered Apple to open access to its devices to other service providers. Until now, computers, mobile phones, and other electronic devices from this company have been operating as a so-called closed ecosystem, where Apple was the manufacturer of the device and the provider of all software.

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The measures primarily target nine functions of the iOS operating system for connectivity, which are used especially for connecting smartphones with devices such as smart watches, headphones, or TV.

Connected devices of all brands should work better with iPhone phones, according to the published plan. This should provide device manufacturers and application developers with better access, according to the commission. This includes, for example, displaying notifications on smartwatches, faster data transfer, and easier device setup.

The second European regulation relates to the integration with iPhone and iPad functions. Its fulfillment should allow better access to the technical documentation of functions that were not previously available to third parties. In addition to this, it should facilitate timely communication, updates, and a more predictable schedule for assessing compatibility and device integration requests.

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The Google Case

Another one of the giants that is the target of the European Union authorities is Google. The brand has been criticized for allegedly restricting app developers from informing users about offers outside of their app store, and also for whether it favors its own search services. An example of promoting its own offer are the Google Shopping, Google Hotels, and Google Flights services. In addition, the fee that the company charges for brokering a new customer for app developers through Google Play, according to the commission, is excessively high.

The parent company of this brand, Alphabet, has also been accused of two specific violations of the Digital Markets Act since March this year, the purpose of which is to limit the power of large technology companies.

According to the first preliminary findings, some features and functions of Google Search favor Alphabet's own services over those of competitors. This concerns, for example, the area of shopping, hotel reservations, financial information, or sports results. Google intentionally displays them at the highest positions in search or at reserved positions with graphically distinct and filtering options.

The second preliminary finding relates to the Google Play app market. Developers in it can't freely redirect consumers to other channels where they would find better offers. And if they manage to lead a customer away from this application, the platform charges unreasonably high fees, such as a commission from each purchase for too long after the initial redirection.

Other major players are still under scrutiny. Two years ago, the European Commission said that in addition to Google and Apple, the transparency of economic competition is also being addressed with the following brands: Meta, Microsoft and Amazon. The Commission stated that it had started to take an interest in 22 specific services of theirs. Among other things, this includes the WhatsApp and Messenger chat applications, social networks Facebook and Instagram or the MarketPlace marketplace.

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Hefty Fine

Companies that violate digital market regulations can be fined by the commission up to ten percent of their global annual turnover. In case of repeated violations, this can be up to 20 percent. What does this mean specifically?

In the case of Alphabet, whose revenue last year reached 350 billion US dollars, that is eight trillion crowns, this represents a "patch" in the amount of almost 900 billion crowns! The company already has its experience with similar payments - in the last decades, it was forced to pay fines for various antitrust violations for more than 8 billion euros, that is approximately 200 billion crowns.

Apple received a fine of 1.95 billion dollars a year ago, which is over 45 billion crowns, for preventing music streaming services from informing users about payment options outside of its App Store.

Both brands are of course defending themselves. The reason is not only that they face further enormous fines, but also because they would open their own systems to others. They argue, among other things, that it would increase the risk in terms of cyber security. In a way, they are right, as experts have long been warning that otherwise, there is a threat of downloading some malicious code. However, there are probably few who doubt that this is just an excuse to avoid payments.

Sources: Ceskenoviny.cz, Al Jazeera, BBC