Eamon Quinn: Apple and other Big Tech firms had a week they would prefer to forget 

EU Commission vice president Margrethe Vestager: Apple and Google’s app store rules will be targeted in the first probes under the Digital Markets Act.

Apple, Google, and Meta — and the thousands of jobs and the billions of corporate tax euros they pay to Ireland — have weathered so many challenges down the years that it would be easy to overlook what regulators in Washington and Brussels have just unleashed in the past few days. 

Lawsuits and full-scale probes on both sides of the Atlantic have ignited talk that governments will consider some sort of break-up of the iPhone giant, Google, and other US tech giants as the only way to remedy their market dominance. 

It comes as the US federal government and 15 states accused Apple of abusing its dominant market in the US for smartphones, while the EU targeted Apple, Meta, and Google over their compliance with the sweeping provisions of the new Digital Markets Act — legislation that Brussels purposefully designed to rein in the power of the American corporates.   

In Washington, the US Justice Department launched a legal case alleging that Apple violated US competition laws by suppressing technology for its messaging apps, digital wallets, and other applications that would have increased competition in the market for smartphones. Apple has denied the US government's allegations. 

'No company is above the law'

The language of the US government complaint was markedly strong. “If left unchallenged, Apple will only continue to strengthen its smartphone monopoly," said Lisa Monaco, who Joe Biden had picked as US deputy attorney general in 2021. "No matter how powerful, no matter how prominent, no matter how popular — no company is above the law,” she said.

The US government is alleging that down the years that Apple responded to upstart competitors "by imposing a series of 'whac-a-mole' contractual rules and restrictions that have allowed Apple to extract higher prices from consumers, impose higher fees on developers and creators, and to throttle competitive alternatives from rival technologies”. 

Along with the attorney generals of 15 states, the US federal government alleges Apple blocked others from developing "innovative super apps"; suppressed mobile cloud streaming services; excluded cross-platform messaging apps; diminished the applications on non-Apple smartwatches; and limited third-party digital wallets, specifically by putting up barriers for developers to make tap-to-pay apps that would work well across all types of smartphones. 

The charge sheet is notable for marking a souring of the relationship between Apple and other US tech firms with Washington legislators, that probably mirrors the ending of a love affair with American consumers as their technology products and services mature. 

It was different in 2013 when a Senate sub-committee had supposedly put Apple under scrutiny for allegedly failing to pay little to the US in taxes on over half of its haul in global revenues, through using global tax structures in Ireland. For this Irish observer, it was remarkable how the questioning of Apple chief executive Tim Cook and his two senior colleagues swiftly turned to fanboy adulation as some of the panel's US legislators praised the capabilities of the iPhone and Apple products. 

The issue over Apple and its taxes shifted across the Atlantic to 2016 when EU Commission competition supremo Margrethe Vestager employed state-aid legislation to find that Apple effectively benefitted from a sweetheart tax deal from the Irish authorities. The legal dispute over whether or not Apple owes up to €13bn before interest in back taxes to the Irish exchequer rumbles on. 

What's your view on this issue?

You can tell us here

Ms Vestager was back on the podium in Brussels last week. She announced that the commission was investigating Apple, Google, and Meta which owns Facebook and Instagram, for their compliance with the Digital Markets Act. In the first wave of probes, Apple and Google’s app store rules will be targeted, and the investigation will then possibly be extended to the subscription fees levied by Instagram and Facebook. The commission has powers to fine the firms up to 10% of their global revenues. 

Ms Vestager has presided over EU competition probes since her first appointment as commissioner eight years ago. But the Digital Markets Act has provided her investigations with significant clout.  

For the first time in decades, regulatory actions on both sides of the Atlantic have revived talk of the break up of Apple and Alphabet, the owner of Google. Big Tech firms have pledged to fight the lawsuits and investigations and the unwinding of such legal matters means the process will carry on for many years. However, the past week has shown that Big Tech is under scrutiny like no other time in the recent past.