Big Tech faces break-up threats amid antitrust crackdown

Big Tech giants like Apple and Alphabet’s Google face significant challenges as antitrust regulators in the United States and Europe crack down on alleged anti-competitive practices. The possibility of break-up orders looms over these companies, marking a watershed moment in regulatory actions against the tech industry. The last such a break-up occurred 40 years ago when AT&T was divided into seven independent entities.

Regulators contend that companies like Apple and Google have created impenetrable ecosystems around their products, hindering competition and innovation. The US Department of Justice has warned Apple of potential break-up orders as it faces legal action for monopolising the smartphone market and inflating prices. Meanwhile, in Europe, regulators are considering drastic measures under the Digital Markets Act (DMA), with Google possibly facing divestiture of its adtech business.

European Union antitrust chief Margrethe Vestager has been vocal about the need for bold action against Big Tech. She has accused Google of anti-competitive practices and suggested that divesting some of its assets may be necessary to ensure fair competition. However, whether regulators will ultimately issue break-up orders remains to be seen, with legal experts highlighting the complexity of such measures, especially concerning Apple’s highly integrated system.

While the possibility of break-ups remains on the table, regulators may opt for alternative remedies, such as fines or behavioural changes. Structural remedies like break-ups would face legal challenges and require careful consideration of their effectiveness. The outcome of these regulatory actions will shape the future of competition in the tech industry, with stakeholders closely watching developments on both sides of the Atlantic.