Analysis-Google, Apple breakups on the agenda as global regulators target tech

BRUSSELS/STOCKHOLM (Reuters) – Big Tech faces a significant challenge as antitrust regulators on both sides of the Atlantic target alleged anti-competitive practices. This crackdown could potentially lead to break-up orders for Apple (NASDAQ:AAPL) and Alphabet (NASDAQ:GOOGL)’s Google, marking a significant shift for the industry.

The increasing number of antitrust probes globally, following EU and U.S. cases, indicates a growing momentum among regulators. Notably, since AT&T (NYSE:T) was broken up 40 years ago, no company in the U.S. has faced the possibility of regulator-led break-up until now.

Google and Apple have both responded to these accusations, with Google disagreeing with the EU’s claims and Apple refuting the U.S. lawsuit.

The term “walled gardens” has been coined to describe the alleged impenetrable ecosystems built around products by companies like Apple and Google, making it challenging for customers to switch to rival services.

In the U.S., the Department of Justice has warned Apple of a potential break-up order as a remedy to restore competition. Meanwhile, mounting threats in Europe suggest further scrutiny, with Apple, Meta Platforms (NASDAQ:META), and Alphabet potentially facing investigations for Digital Markets Act (DMA) violations.

EU antitrust chief Margrethe Vestager has been vocal about taking drastic measures, including possible divestment of assets from Google’s adtech business. European Parliament lawmaker Andreas Schwab emphasized the aim of enforcing open and fair markets while encouraging innovation.

Despite these challenges, it remains uncertain whether regulators will issue break-up orders, with legal complexities and potential fines also being considered. The highly integrated nature of Apple’s system presents additional challenges compared to Google.

Structural remedies such as break-ups will likely face legal challenges and extensive court testing.