EU Fines Google €890m for Search Bias and App Store Restrictions
European regulation of US tech firms is becoming an economic and political flashpoint between the transatlantic neighbors. The latest round of fines is likely to add fuel to the flames.
Google is facing mounting regulatory pressure in Europe under the Digital Markets Act. Photo: Reuters/Carlos Jasso
|
The European Commission has fined Google €890m, or just over $1bn, under the Digital Markets Act (DMA) for favoring its own services over those of competitors.
The move risks provoking retaliation from the Trump administration, which has been vocal about what it considers to be European interference in the operations of American tech firms.
Announcing the fines, the European Commission said that it had reached two decisions finding Google non-compliant with the DMA. The first concerned "self-preferencing" its own services on Google Search over those of rival platforms, while the second involved restricting businesses from directing consumers to "alternative, often cheaper, purchase channels", a practice known as "steering".
For these breaches of the DMA, the Commission fined Google €460m ($523m) and €430m ($489m) respectively.
Under the DMA, which the Commission describes as the EU's law to "make the markets in the digital sector fairer and more contestable", the bloc has established criteria to identify so-called "gatekeepers": large digital platforms offering "core platform services" such as search engines, app stores and messenger services.
Gatekeepers are legally required to comply with the obligations and prohibitions listed in the DMA, or face fines of up to 10% of the company's global annual turnover, or up to 20% in the event of repeated violations.
Google was designated a gatekeeper in September 2023.
The Violations Behind the Fine
On the first charge, the Commission said that gatekeepers must not treat their own services more favorably in ranking than third-party services, adding that they are required to apply "transparent, fair and non-discriminatory" conditions to ranking.
Despite this, the Commission said it had found that Google gave "preferential treatment to its own services", including in areas such as shopping, hotels and transport, over those of rivals on Google Search.
"Google displays its own services more prominently in search results, including at the top of the search results page or by using enhanced visuals and filters, while similar third-party services do not have the same prominence", it said.
On the second charge, the Commission said Google had failed to meet its DMA obligation to let app developers distributing via Google Play inform customers of alternative offers and direct them toward those offers for purchases.
The Commission added that Google "prevents app developers from freely communicating and promoting offers and concluding contracts" with users through distribution channels of their own choosing.
As a result of these failings, the Commission ordered Google to treat third-party services featured in Google's search results in a "fair and non-discriminatory manner", and to allow app developers using Google Play to "freely communicate, promote offers and conclude contracts" with users both within and outside the Google Play app store.
In its statement, the Commission said it had already begun a dialogue with Google on how it might comply with its DMA obligations, and observed that the tech giant had already started making changes to address the steering issue.
Google is required to comply with the Commission's decision within 60 days. Failure to do so would expose it to periodic penalty payments of up to 5% of its total worldwide turnover.
The company may yet appeal the Commission's decision.
Responding to the news of the fines, American Ambassador to the European Union Andrew Puzder said that "enough is enough".
Brussels, he said, was once again "using regulation as a blunt instrument against American innovation", the latest in a pattern of penalties against Google. While the United States supported "fair competition", he added, the DMA fines risked "chilling the very dynamism that drives technological progress and benefits users everywhere".
US Lawmakers Urge Trump to Act
Separately, Reuters reported this week that a group of 25 US lawmakers had written to President Donald Trump urging him to take action against Europe in retaliation for what they view as policies that unfairly target American tech companies.
The letter, seen by Reuters, took aim at the DMA, arguing that it limited corporations such as Google, Apple, Amazon, Meta, Microsoft and others.
"We write to bring to your attention the many ways the EU continues to pursue anti-competitive acts, policies, and practices as a tool of economic extraction and regulatory coercion against American firms and to encourage your administration to take decisive action before the EU further entrenches this anti-American regime", the lawmakers reportedly wrote.
Despite the apparent disagreement, American authorities have themselves frequently taken issue with Google's business practices.
The US Department of Justice, for example, brought an antitrust case against the company in 2023 over alleged illegal monopolization of the digital advertising technology (adtech) market, building on a 2020 federal lawsuit centered on Google's search engine dominance.
Welcome to the comments section of the Štandard daily. Please take note of our guidelines, comments are moderated by us. You can contact the moderators at support@statement.com.
Participate in the discussion
Comments are available to subscribers only. If you'd like to join the discussion, choose a subscription starting at €6.72 per month.
All comments 0
Register
Comments are available to registered users only. If you'd like to join the discussion, register here.
