Google fined €890 million in the EU
On July 23, the European Commission imposed two fines on Google totaling €890 million for violating the Digital Markets Act (DMA). This is not the first time the regulator has penalized tech giants; previously, the European Commission fined AliExpress €550 million for illegal and counterfeit goods on its platform. This time, the grievances concern how Google ranks search results and how it restricts app developers in Google Play.
According to the European Commission, the first fine of €460 million was for self-preferencing in Google Search, and the second, for €430 million, was for restricting businesses from directing consumers to alternative, often cheaper, purchase channels through Google Play. The Commission adopted two decisions establishing Google’s non-compliance with DMA requirements regarding self-preferencing its own services in Google Search and restrictions on businesses redirecting consumers to alternative purchase channels on Google Play, imposing fines of €460 million and €430 million, respectively.
The Commission found that Google gives preferential treatment to its own services, including shopping, hotels, and travel, compared to third-party services in Google Search, which violates the company’s obligations under the DMA.
According to the European Commission, Google displays its own services much more prominently in search results, particularly at the top of the results page or with enhanced visuals, while similar third-party services lack the same visibility.
The second violation concerns so-called “steering” – the ability for developers to inform users about cheaper offers outside of Google Play. Under DMA rules, app developers distributing through Google Play must be able to inform users about alternative, often cheaper, offers for free and direct them to these offers, for example, on websites or in alternative app stores. The Commission found that Google has not fulfilled this obligation, specifically by preventing developers from freely communicating about offers and concluding agreements with users through their chosen distribution channels, including third-party app stores.
“Google has fallen short of effective compliance with the Digital Markets Act, and today we have taken decisive yet balanced enforcement action sanctioning these breaches. The best products should succeed because they’re better, not because they’re owned by the company running the search engine”, – stated Teresa Ribera, Executive Vice-President for Clean, Fair, and Competitive Transition.
“We found that Google harms businesses offering similar services, such as shopping or sports, by not granting them the same level of prominence on Google Search. Google must now bring the non-compliance to an end”, – noted Henna Virkkunen, Executive Vice-President for Technological Sovereignty, Security, and Democracy.
Google is obligated to comply with the Commission’s decision within 60 days, or it faces periodic penalty payments of up to 5% of the company’s total worldwide turnover. The Commission also noted that following constructive dialogue, Google has already proposed and begun testing changes in how it displays its own services in search for free services – shopping, hotels, and flights.
Investigation Lasted Over Two Years
Google received “gatekeeper” status in September 2023 for its Google Search service. On March 25, 2024, the Commission opened an investigation into Google’s non-compliance with measures against self-preferencing and steering rules.
These are the first fines for the American tech giant under the DMA, but they are the fifth and sixth overall fines for the company for anti-competitive practices in the EU. Over nearly two decades, the total amount of penalties against Google has reached €10.38 billion.
These fines are the third under the DMA, following penalties received by Apple and Meta Platforms in April of last year. Google has the right to appeal the European Commission’s decision, however, according to analysts’ estimates, the appeal process at the EU Court of Justice could take several years.
Brussels Intensifies Pressure on Tech Giants
The fines against Google are another step by the European Commission in combating violations of digital rules by large companies. Earlier, we reported that the European Commission fined Temu €200 million for dangerous chargers and toxic toys sold on the platform without proper quality control.
We also wrote about how companies are responding to new digital security challenges: Google launched voice-spoofing call protection on Android to protect users from scammers who use artificial intelligence to imitate voices.