EU’s crackdown on Apple, Meta and others is to avoid forced breakups, top official says

European authorities have introduced more stringent regulations for U.S. tech giants this week, but a senior official from the European Union has emphasized that the objective is to avoid compelling the breakup of these major corporations.

The European Commission, which serves as the executive branch of the EU, has identified six ‘gatekeeper’ companies on Wednesday. These are firms with an annual turnover exceeding 7.5 billion euros ($8 billion) or boasting 45 million monthly active users within the EU.

The designated gatekeepers are Amazon, Alphabet, Apple, Microsoft, Meta, and ByteDance. They now have a six-month window to adhere to enhanced market regulations, which include obligations such as not preventing users from uninstalling pre-installed software or apps and not displaying preferential treatment towards their own services.

Thierry Breton, the EU’s Commissioner for the Internal Market, stated, ‘If these companies fail to comply, although I hope they will, we possess the authority to impose fines of up to 10% of their global revenue.

The fine has the potential to escalate to 20% of the company’s global revenue if they persistently fail to adhere to the regulations.

Tech Regulation and European Market Access

Thierry Breton emphasized, ‘In the event of continued non-compliance, we do possess the means, including the option to dismantle these corporations. However, I am resolutely against resorting to such measures. I can affirm that our dialogues with these companies are conducted professionally, and I am confident that they are heading in the right direction,’ said Breton.

Microsoft and Apple have contested the European Commission’s position, asserting that their services, Bing and iMessage, should not be subject to the newly proposed regulations under the EU’s Digital Markets Act. The commission has initiated an inquiry to evaluate these companies’ arguments and will render a verdict within five months to determine their validity.

In recent years, the European Union has intensified its scrutiny of major tech players, a move that has drawn criticism for being perceived as anti-American, given that most of these companies are based in the United States.

Thierry Breton expressed his perspective, stating, ‘I take pleasure in providing both European and non-European successful companies the opportunity to enter our digital marketplace, which, incidentally, surpasses the scale of the United States. It’s highly appealing, and we welcome the prospect of major non-European firms benefiting from it.

Microsoft and Apple Challenge EU Regulations

Microsoft and Apple have contested the European Commission’s position, asserting that their services, Bing and iMessage, should not be subject to the newly proposed regulations under the EU’s Digital Markets Act. The commission has initiated an inquiry to evaluate these companies’ arguments and will render a verdict within five months to determine their validity.

In recent years, the European Union has intensified its scrutiny of major tech players, a move that has drawn criticism for being perceived as anti-American, given that most of these companies are based in the United States.

Thierry Breton expressed his perspective, stating, ‘I take pleasure in providing both European and non-European successful companies the opportunity to enter our digital marketplace, which, incidentally, surpasses the scale of the United States. It’s highly appealing, and we welcome the prospect of major non-European firms benefiting from it.

Amazon Marketplace, Apple AppStore, Instagram, TikTok, and GoogleSearch are among the 19 platforms subjected to the more stringent regulations. Additional companies, such as Netflix, PornHub, and Airbnb, may also be considered for inclusion in this list.

Conclusion

European authorities have imposed stricter rules on U.S. tech giants but aim to avoid breaking them up. The European Commission named six “gatekeeper” firms like Amazon and Apple, granting them six months to comply with enhanced market regulations.

Non-compliance could lead to fines up to 10% of global revenue and potential dismantlement. Microsoft and Apple have contested these rules amid increased scrutiny of tech giants, prompting debates about anti-American bias. Thierry Breton, EU’s Commissioner for the Internal Market, welcomes non-European firms in the digital marketplace.

Originally published at https://businessdor.com on September 7, 2023.