Kenneth Glad
The latest enforcement action raises fresh questions about competition on major digital platforms. Regulators and the company disagree sharply over who will benefit from the required changes.
The European Commission has fined Google €890 million for breaches of the Digital Markets Act. The technology company warns, however, that the decisions could leave European users with poorer services.
The penalties cover two parts of Google’s business. One concerns the way its own services appear in search results. The other relates to restrictions placed on app developers using Google Play.
Alphabet, Google’s parent company, was designated as a gatekeeper in September 2023 for several major platform services, including Google Search and Google Play. The European Union’s Digital Markets Act (DMA) places additional obligations on such platforms to prevent them from using their market power to unfairly disadvantage competing services.
Search results favour Google services
The larger fine, €460 million, concerns Google Search. According to the European Commission, Google gave its own shopping, hotel, transport and sports services more prominent treatment than comparable third-party products.
Its services could appear higher on results pages or benefit from enhanced visual displays and filters. Rival providers were not offered equal visibility, the Commission found.
The DMA requires gatekeepers to apply fair, transparent and non-discriminatory conditions when ranking their own services alongside those operated by other companies.
A separate €430 million penalty relates to Google Play. Regulators concluded that Google prevented app developers from freely promoting alternative offers or completing transactions through websites, rival app stores and other channels of their choice.
These restrictions are known as anti-steering measures. The rules are designed to ensure that developers can tell customers when lower-priced purchasing options are available elsewhere.
The Commission also examined fees linked to users initially acquired through Google Play. It accepted that Google may charge for helping developers gain customers, but found that the size of the relevant fees and the length of the charging period exceeded what the DMA permits.
Warns of weaker services
Google rejected the Commission’s interpretation. DR reports that Kent Walker, the company’s vice president of global affairs, said the measures would damage products rather than improve competition.
He argued that compliance had already forced Google to remove functions used by European consumers, including real-time prices and direct availability information for flights, hotels and restaurants.
Walker also said changes to Google Play could weaken safeguards designed to protect users. Google maintains that the enforcement action benefits a limited group of complainants while imposing wider costs on consumers and businesses.
The company’s response centres on a practical argument where rules intended to open digital markets may also limit the way integrated services are presented and operated.
Consumer groups support the fines
Morten Bruun Pedersen, chief economist at the Danish Consumer Council, rejected Google’s account. Speaking to DR, he said the case concerned self-preferencing by a company that controls the marketplace in which competing services must operate.
He described the fines as a step towards changing behaviour in a market dominated by large American technology groups.
Augustin Reyna, director general of the European Consumer Organisation, or BEUC, said Google had restricted consumer choice and weakened fair competition. He called on the company to submit remedies that comply with the DMA.
Google has been ordered to end both infringements within 60 days. It must treat competing search services fairly and allow app developers to communicate offers and conclude contracts through alternative distribution channels.
According to the European Commission, failure to comply could result in recurring penalties of up to five percent of Alphabet’s total worldwide turnover.
Sources: European Commission, DR, Danish Consumer Council
