AAPL, GOOG, META face Downdraft soon ?
Brewing storm in the horizon?
$Apple(AAPL)$ , $Meta Platforms, Inc.(META)$ and $Alphabet(GOOG)$ are rumoured to be investigated for potential violations of the European Union's Digital Markets Act (DMA).
This could lead to hefty fines by end 2024, according to people with direct knowledge of the matter.
The European Commission will likely announce the investigations soon and issue decisions before EU antitrust chief Margrethe Vestager's term ends in November 2024.
Ironically, the Commission declined to comment.
Neither did Apple, Meta and Google (immediately) respond to requests for comment.
What have taken place so far?
In a recent interview with Reuters, Ms Vestager has said that both Apple and Meta's new fees for their services may hinder users from enjoying the benefits of the DMA.
And this would be part of any investigation.
She also singled out tactics used (by some companies) to disparage rival products or services to discourage users switching to them, saying it was unwise for companies to do so.
Vestager also said she wanted to speed up any DMA investigations, aiming to get decisions out preferably in 6 months so that users and apps developers can see the fruits of the new rules soon.
Traditional EU antitrust probes in contrast took years.
Rivals of the 3 companies have shared frustrations with the EU competition enforcer, saying measures announced by the companies to re-wire their core platform services are inadequate.
The DMA requires the three companies, as well as Microsoft, Amazon.com and TikTok owner ByteDance:
To allow users to remove any pre-installed software or app if they want.
To get users' consent to use their data across their various services or for personalised ads.
The companies are not allowed to favour their “own” services or products over rivals on their platforms.
What is the penalty?
DMA breaches could cost the companies as much as 10% of their global annual turnover.
The landmark EU tech rule requires companies to give users and rivals more choices to ensure a level playing field.
My viewpoints: (mine & mine only)
Did the EU regulators finally wake up from deep sleep to realize this has been on-going and against their policies?
Honestly, how does EU ensure the Gang of 6 comply with its demands?
How does EU ensure its citizens are IT-savvy enough to perform de-installation of apps?
Whether the DMA will be effective and levels the playing fields, its left to be seen.
Of the 6 IT giants targetted, I fear that $Apple(AAPL)$ and $Alphabet(GOOG)$ would be impacted the most. (see below)
Besides having to deal with EU’s DMA lawsuit, they are already entwined with similar lawsuit States side. (see above)
The US lawsuit alleges that Apple has monopoly power in the smartphone market and leverages control over the iPhone to “engage in a broad, sustained, and illegal course of conduct.”
For Google lawsuit, regulators are alleging Google has stymied competition by paying for the rights for its online search engine to be the automatic place to handle queries on the iPhone and a variety of web browsers in an arrangement that generates an estimated $15 billion to $20 billion annually.
Eventually will both EU and US regulators go after the remaining Gang of 6, is still out in the open.
Is this the beginning of the end of the Magnificent 5 (Tesla & Nvidia are excluded) or FAANG?
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Do you think this is the beginning of the end of Apple Inc, Google, Meta Platform, Amazon, Microsoft and ByteDance (Tik Tok owner) ?
Do you think both Apple Inc and Google will be most impacted (Stock price wse) amongst the rest?
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