European Commission Takes Aim at Tech Giants Microsoft and Apple
The European Commission has set its sights on two American tech giants, Microsoft and Apple, accusing them of violating EU competition rules. Microsoft is under scrutiny for bundling its Teams videoconferencing application with its Office software suite, while Apple faces allegations regarding restrictive rules in its App Store.
Microsoft Under Fire for Teams Integration
Microsoft is currently facing allegations from the European Commission for linking its Teams videoconferencing application with its popular office software such as Word and Excel, potentially violating EU competition rules. Despite Microsoft dissociating Teams from its Office 365 and Microsoft 365 suites since October, Brussels remains unsatisfied. The Commission believes further modifications are necessary to restore competition. Microsoft President Brad Smith has stated that the company is committed to finding solutions to address the Commission's concerns.
Apple's App Store Practices Questioned
In parallel, Apple is under investigation for potentially violating free competition regulations through its App Store rules. The European Commission argues that these rules prevent developers from directing consumers to alternative distribution channels. The Digital Markets Act, which came into force in March, empowers the Commission to enforce changes and impose hefty fines. Apple could face a fine of up to 10% of its global revenue, amounting to nearly $40 billion. The European Commissioner for the Internal Market, Thierry Breton, emphasized the Commission's determination to use its regulatory tools effectively.
Both Microsoft and Apple have the opportunity to respond to these allegations, but the European Commission is prepared to take stringent actions if the companies' responses are deemed unsatisfactory. These actions could include significant fines or even expulsion from the European Union market.
- Microsoft has already taken steps to address the European Commission's concerns by offering certain suites without Teams. However, the Commission believes these measures are insufficient to restore competition fully.
- Apple has similarly made modifications to comply with the Digital Markets Act. Despite this, the European Commission maintains that the current App Store rules still hinder competition by preventing developers from informing consumers about alternative purchasing options.
- Both companies are now in a position to present their defenses. The European Commission has until March next year to make a final decision on Apple's case. If the Commission's suspicions are confirmed, Apple could face a monumental fine or even more severe penalties.
