New Tariffs Incoming: European authorities designated Google as a "gatekeeper" in 2023, requiring the US corporation to address its anti-competitive practices in the online search market. Now, the EU has begun imposing financial penalties on the company because Google is still allegedly abusing its dominant position in search to promote its own services.ces.
The European Commission has announced two new fines against Google totaling $1 billion. The EU's executive body penalized the Alphabet corporation for violating rules contained in the Digital Markets Act, which imposes tighter regulations on organizations designated as "gatekeepers" in specific markets, such as online search.
In particular, the EC fined Google €460 million for one violation and €430 million for another, citing two major breaches of the DMA. Mountain View was "caught" favoring its own services through the Google Search platform and restricting third-party app developers from offering customers better commercial deals through the Google Play Store.
The EC explained that the DMA requires gatekeepers to treat third-party services fairly and in a non-discriminatory manner. However, Google was found to be giving its own services preferential treatment over competitors, consistently placing its own search results for shopping, hotels, transportation, and other business services above third-party offerings.
The second violation concerns Google Play, the app store that Google has allegedly exploited to maintain a dominant position in mobile app marketplaces. Under the DMA, app developers should be able to inform potential customers about alternative, cheaper purchase options, directing users outside Google Play to external websites or even other app stores.
Google's anti-steering practice prevented app makers from promoting these third-party offers, the EC said. The company is allowed to charge a fee for facilitating the initial acquisition of a new customer through its own store, the Commission explained, but the fees actually charged by Google and the time required to process the transactions were found to violate DMA rules.
After punishing the company with a $1 billion fine, Brussels ordered Google to make up for its DMA violations. The cloud giant must now treat third-party services featured in Search results in a fair and non-discriminatory manner while allowing Android app developers to freely promote their own payment options outside Google Play's walled garden.
Today's decision marks a significant milestone in an investigation the EC launched in 2024, a year after designating Google as a gatekeeper in the online search market. Google now has 60 days to comply with the Commission's decision or risk being hit with further fines of up to 5% of its total global revenue.
The EC acknowledged that Google engaged in a "constructive dialogue" with EU authorities but fined the company anyway. The US giant has already proposed and begun testing some changes to web search results and AI Overviews, as well as Google Play's steering terms. However, the company expressed its dissatisfaction with the new rules imposed on the European market by the DMA.
According to Google's president of global affairs, Kent Walker, the gatekeeper rules are merely forcing "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."
The DMA is proving to be a significant driver for change in Europe's digital market, with Google and other major US corporations being forced to improve competition in the Old Continent. Earlier this month, Brussels ordered Mountain View to provide third-party AI chatbots with the same unrestricted access to Android phones as Gemini.
The EU just fined Google $1 billion for favoring its own services in search and Play Store
