In a notable alignment of tech giants, Apple has voiced support for Alphabet's Google in its ongoing battle with European Union regulators over proposed Digital Markets Act rules. The intervention, submitted on the final day of a European Commission consultation, warns that requiring Android to open key features to rival AI services could compromise user privacy and security.
Privacy and Security Concerns
Apple argued that the draft rules present "urgent and serious concerns," posing "profound risks for user privacy, security, and safety." The company highlighted its own stake in the outcome, suggesting the regulatory logic could also affect its operating systems. The European Commission is expected to decide by July 27 whether to impose these measures on Alphabet.
Android's Role in AI Competition
Android serves as the foundation for Google's AI initiatives, including Gemini and Search, as AI assistants transform how users search, shop, draft emails, and interact with their devices. Google has criticized the plan as an "unwarranted intervention," arguing it would force the company to share sensitive hardware access, potentially undermining security safeguards for European users.
Regulatory Perspective
EU antitrust chief Teresa Ribera countered that the proposed changes would give Android users more choice in AI services. Currently, Google reserves certain core Android functions for its own AI products like Gemini. The rules target wake words, contextual data, app functions, and permissions, aiming to allow third-party AI tools to interact with apps, send emails, order food, and adjust phone settings.
Market Reaction and Financial Performance
Alphabet's Class A shares rose nearly 4% to $402.98 in U.S. trading, buoyed by strong first-quarter results. Revenue jumped 22% to $109.9 billion, with Google Cloud revenue surging 63% to $20.0 billion. "Our AI investments are delivering value throughout the company," said CEO Sundar Pichai. This week, Alphabet also announced plans for its inaugural yen bond, while Amazon lined up its first Swiss franc deal, both seeking foreign capital for AI infrastructure.
Broader Implications
The EU case remains uncertain. Regulators may ease restrictions following feedback or take a tougher stance, increasing compliance costs or requiring Google to unlock security-critical Android features. Last week, the Commission deemed Google's proposed fix in a related DMA dispute "not strong enough," leaving the possibility of fines. Alphabet also disclosed discussions with SpaceX and other partners for Project Suncatcher, an initiative to deploy solar-powered satellites with Google's Tensor Processing Units into an orbital AI cloud network.
