Europe’s digital rulebook has claimed another Big Tech target. The European Commission fined Google €890 million, accusing it of favouring its own services in search results and restricting app developers from steering users towards cheaper alternatives.
The Commission announced a massive tech fine against Google under the Digital Markets Act (DMA). In reality, the executive imposed two “separate but related” fines: one on so-called “self preferencing” and the other on “anti steering”.
The Commission is on a roll with tech fines. Earlier this week, it fined Chinese online retail store AliExpress €550 million for allowing the sale of illegal, unsafe and fake goods. It is a record penalty under the Digital Services Act.
A strategic move?
That announcement, preceding Thursday’s Google case, may well be strategic as the EU wants to avoid reprisals from the US administration for being seen to target only US companies. During the presentation of the Google anti steering case, EU officials were keen to underline that there are parallels in the US following rulings by judges under its own antitrust laws. Significantly however, there is no equivalent sanction for self preferencing.
The best products should succeed because they’re better, not because they’re owned by the company running the search engine. — Teresa Ribera, Executive Vice-President for a Clean, Just and Competitive Transition
The self-preferencing infraction is fairly self explanatory. Under the DMA, gatekeepers like Google must not give preferential ranking to their own services. The Commission found that the tech giant consistently prioritised its own services, including shopping, hotels transport and sports results, over those of third parties in Google Search by putting them at the top of the page or by “using enhanced visuals and filters”.
Gatekeepers should “apply transparent, fair and non-discriminatory conditions to such ranking”, said the Commission slapping Google with a €460 million fine for failing to do so. “The best products should succeed because they’re better, not because they’re owned by the company running the search engine,” said Competition Commissioner Teresa Ribera.
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Google Play under scrutiny
The second fine, of €430 million, relates to Google’s app store Play. Under the DMA, app developers that distribute their apps via Google Play should be able to inform customers free of charge about their alternative offers that are available via websites or other app stores. The Commission found that Google prevents developers from doing this.
This isn’t fair competition. It’s product degradation driven by a small group of self-serving complainants. Regulation should improve products, not make them worse. — Kent Walker, President of Global Affairs, Google & Alphabet.
“While Google can receive a fee for facilitating the initial acquisition of a new customer by an app developer via Google Play, the level of the steering-related fees charged by Google and the length of the charging period for these fees went beyond what is considered compliant with the DMA,” said the Commission.
The tech giant pushes back
As well as the financial sanctions, Google must take steps to rectify the situation.
“This implementation of the DMA continues to break everyday products. To comply, we are having to strip away real-time search features Europeans love—like instant pricing and direct availability for hotels, flights, and restaurants—and dismantle safety protections on Google Play,” said Kent Walker, President of Global Affairs of Google & Alphabet.
If Google fails to comply, the Commission should not hesitate to impose even harder sanctions. — Agustín Reyna, Director General, BEUC
“This isn’t fair competition; it’s product degradation driven by a small group of self-serving complainants, with European businesses and consumers taking the hit. Regulation should improve products, not make them worse.”
Consumer watchdog backs the decision
BEUC, the umbrella organisation representing consumer groups across Europe, welcomed the Commission’s decision. Its Director General, Agustín Reyna, said Google had limited consumer choice and undermined fair competition in digital markets. “It was high time for the Commission to enforce the law,” he noted.
“We expect Google to immediately present the Commission with solutions that comply with the EU’s digital market rules. If Google fails to comply, the Commission should not hesitate to impose even harder sanctions.” He added that otherwise it is consumers and other businesses in digital markets who end up paying the price of Google’s illegal behaviour.
The fines are the third issued under the DMA following those on Meta and Apple. The combined amount is a new record, although an anti-steering fine imposed on Apple was higher. That is partly because Google has been involved in a “constructive dialogue” with the Commission and is testing changes to solve the problems.
The company is required to comply with the Commission’s decisions within 60 days. Otherwise it risks periodic penalty payments of up to five per cent of its total worldwide turnover.
