We probably shouldn’t expect Apple and Meta, two US tech giants, to experience significant difficulties after they were penalized by the bloc. But they shouldn’t attack Europe, an analyst tells Cybernews.
Last week, EU regulators quietly announced that Apple and Meta will be fined for violating the Digital Markets Act, a law intended to increase competition in the digital economy.
Apple was fined €500 million ($570 million), and Meta was fined €200 million ($230 million).
“Apple breached its anti-steering obligation under the Digital Markets Act (DMA), and that Meta breached the DMA obligation to give consumers the choice of a service that uses less of their personal data,” reads the statement on the European Commission's website.
High tensions, high stakes
The DMA, introduced in 2022, designates a few select companies, mainly US tech firms, as digital gatekeepers, imposing a slew of compliance rules and allowing European regulators to impose changes on their businesses.
As if it was so simple. Even though the Commission’s statement seems almost shy, reactions on the other side of the Atlantic were furious.
Meta and Apple immediately said they were likely to appeal and, using language Trump knows perfectly well, called the ruling a tariff-like attack on American companies.
“The European Commission is attempting to handicap successful American businesses while allowing Chinese and European companies to operate under different standards,” Joel Kaplan, Meta’s chief global affairs officer, said in a statement.
“This isn’t just about a fine; the commission forcing us to change our business model effectively imposes a multibillion-dollar tariff on Meta while requiring us to offer an inferior service.”
The Trump administration, even though US tech firms are also on trial back in Washington, rushed to defend the tech giants. The White House announced that fines on Apple and Meta by the EU were a “novel form of economic extortion,” not to be tolerated by the US.
Tensions are high, needless to say. With disputes over tariffs and trade looming in the background, retaliatory measures could ignite a full-scale transatlantic rift, some say.
After all, big tech - and especially social media - are important to Trump and his idea that the media should be telling America how great the MAGA agenda is. Meta and other firms have indeed been playing it nice with the current administration.
However, other analysts urge calm. One of them is William Echikson, a non-resident senior fellow with the Tech Policy Program and editor of the online tech policy journal Bandwidth at the Center for European Policy Analysis (CEPA).
Echikson told Cybernews he actually thought the penalties announced by the EU were more modest than they could have been. To him, it seems that the big tech firms are facing far greater danger at home, where Google, for instance, could even be broken up or at least forced to sell the Chrome browser.
“Theoretically, the Commission could ask for something similar, but it certainly has not. Indeed, the Europeans are very cautious, and I know that within the Commission there was hesitancy,” said Echikson.
Need competition? Here’s AI for ya
As noted last week by The New York Times, the tech behemoths have indeed “amassed trillions of dollars in share value as owners of products and services that are essential for communication, commerce, and information.”
Curbing their power or, at the very least, monopolistic tendencies could be viewed as a noble cause.
Besides, many countries beyond Europe share similar views on regulating big tech – Japan and the United Kingdom, among others, have already adopted rules similar to the DMA. CEPA calls it the “Brussels Effect.”
But Echikson has severe doubts whether last week’s rulings could actually increase competition in the global digital economy.
“I don’t think regulation is going to be the decisive factor – it’s going to be the market. We’re seeing real competition from AI with OpenAI coming in, for example,” he told Cybernews.
“Up until now, there hasn’t really been a regulatory or antitrust action that has determined what goes on in tech. We had the Microsoft case at the beginning of the century – has it slowed the company down? No, what fundamentally changed the game was cloud computing and the emergence of Google.”
"I don’t think that yelling at Europeans or threatening them is helpful. Right now, Europeans don’t want this; they want to avoid full-scale hostility,”
William Echikson.
According to Echikson, US tech firms are indeed “pissed off” about European regulation but are much more worried about tariffs and how they could hurt their businesses.
“I talk to Apple a lot. Yes, they think these interventions are terrible, blah blah. But in the end, I don’t think this is a unique threat to them. Tariffs may be tougher, especially with all the current uncertainty,” he said.
Apple is perhaps the highest-profile example of an American company that’s gotten caught up in Trump’s trade war. Current tariffs could reportedly cost Apple about 6% of its annual earnings.
To Apple, this is, unfortunately, a perfect storm. It makes about three-quarters of its overall revenue from physical goods – iPhones, Macs, and Apple Watches – mostly made in China or elsewhere in Asia. And the US is the firm’s largest market.
According to Echikson, another glaring issue is that the Trump administration doesn’t seem to know what it’s actually doing: “Even the Americans have no idea what Trump is doing – I don’t think there’s a strategy.”
“Either way, I don’t think that yelling at Europeans or threatening them is helpful. Right now, Europeans don’t want this; they want to avoid full-scale hostility,” Echikson told Cybernews.
“Eventually, if things go really, really bad, yeah, I think the Europeans could begin to treat American companies like Chinese companies – as potential enemies. But that’s still far off.”
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