Intelligence from Zhitong Finance and Economics APP shows that as antitrust regulators on both sides of the Atlantic Ocean crack down on anti-competitive practices, tech giants are facing their biggest challenge in decades. This may lead to Apple and Alphabet (GOOGL.US) under Alphabet-C being ordered to split up, a first in the industry.
At the same time, this has also sparked regulatory actions worldwide. Following cases in the EU and the US, the number of antitrust investigations in various countries continues to rise. Since AT&amp;T (T.US) was split up 40 years ago, no company in the US has faced a potential regulator-led breakup. In 1984, AT&amp;T (T.US) (also known as MaBell) was divided into seven independent companies, known as the &#34;BabyBells&#34;. Currently, AT&amp;T, Verizon, and Lumen are the only surviving entities.
Currently, regulators accuse companies like Apple and Alphabet-C of building impregnable ecosystems around their products, making it difficult for customers to switch to competitors' services, leading to the term &#34;walled garden&#34;. Alphabet-C disagrees with the EU's accusations, while Apple claims that the US lawsuit is factually and legally incorrect.
The US Department of Justice, along with 15 states, sued Apple for monopolizing the smartphone market, obstructing competitors, and raising prices. Last Wednesday, the company was warned that dissolution orders are not ruled out as a remedy to restore competition.
Nevertheless, this case may still take several years to be judged, and Apple has stated that it will fight the case to the end.
Threats in various parts of Europe are also escalating. Anonymous sources revealed that Apple, Meta Platforms (META.US), and Alphabet are under investigation for violating the Digital Markets Act (DMA). If found in violation multiple times, they may face hefty fines or even dissolution orders.
Last year, the EU's antitrust chief, Margrethe Vestager, accused Alphabet-C of engaging in anti-competitive practices in its ad tech business and suggested that Alphabet-C may have to divest its seller tools. This statement may pave the way for harsh measures in the future.
Vestager stated that requiring Alphabet-C to sell off some assets seems to be the only way to avoid conflicts of interest, preventing Alphabet-C from favoring its online digital ad tech services over advertisers and online publishers. Vestager is expected to make a final decision by the end of this year.
European Parliament member Andreas Schwab, who played a key role in drafting the landmark EU DMA tech rules implemented this month, stated that lawmakers will come down hard on tech giants who flout the rules
Schwab said last Friday, &#34;If these companies do not comply with the DMA, Parliament will demand a breakup. Our ultimate goal is to open up the market, make it fair, and allow more innovation.&#34;
Breakup Difficult to Achieve
In fact, regulatory agencies, when considering various options, are far from certain whether they will issue dissolution orders, and any action may simply result in fines. Legal experts also believe that compared to the 1998 lawsuit against Microsoft (MSFT.US), the lawsuit against Apple this time may be more difficult.
&#34;In the EU, breaking up companies is seen as a last resort. This tradition is rare, and such a situation has never occurred before,&#34; said an EU Commission official who declined to be named.
Damien Geradin, a lawyer at Geradin Partners law firm, said that compared to Alphabet-C, Apple's highly integrated system would also make a breakup difficult, &#34;Integrated things are much more complex. For example, you cannot force Apple to divest its App Store.&#34;
He said that taking remedial action against Apple is a better way, such as forcing the tech giant to do certain things, while for Alphabet-C, the breakup order may target acquisitions made to strengthen its key services.
Max von Thun, director of the advocacy group Open Markets, said, &#34;They (the Department of Justice) are more likely to take remedial measures such as opening up hardware features, or ensuring that developers are not discriminated against in pricing.&#34; It is understood that Apple's annual revenue of nearly $400 billion mostly comes from hardware sales, including iPhone, Mac, iPad, and watches, followed by services with annual revenue of about $100 billion.
He said, &#34;The Department of Justice may claim that everything is still under discussion, but that does not necessarily mean they will choose this path.&#34;
Assimakis Komninos, a partner at White &amp; Case law firm, said that structural remedies such as breakups will ultimately be tested in court.
He said, &#34;There is not much past experience in forcing structural measures like breakups, and a small amount of experience suggests that, in addition to facing significant legal challenges, this approach is also very tricky.&#34;

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