Google has been hit with an €890 million ($1.02 billion) fine by the European Commission after regulators concluded the company breached the European Union’s Digital Markets Act (DMA) by favoring its own services in search results and restricting app developers on the Play Store.
The penalty, announced on Thursday, is one of the largest enforcement actions taken under the EU’s new tech competition rules, which are designed to limit the market power of major digital platforms.
The fine is split into two parts. The first, worth €460 million (about $525 million), relates to Google’s search business. The Commission found that Google consistently gave its own shopping, hotel, transport and sports services more prominent placement in search results than competing platforms.
What is behind the fine?
Regulators said Google’s services were ranked at the top of search pages and were given improved visuals and filters, making them more prominent to users than similar third-party services.The best products should win because they are better, not because they belong to the company that runs the search engine,” said European Commission Executive Vice President Teresa Ribera.
The second penalty, €430 million (around $491 million), is for Google’s Play Store policies.
The Commission said that Google prevented app developers from freely informing users about alternative payment options, including offers on their own websites or third-party app stores that could be cheaper than those via Google Play.
Regulators also said Google’s fees for directing users away from the Play Store were too high under the Digital Markets Act.
Google given 60 days to comply
Google has been ordered to comply with the Commission’s ruling within 60 days. Failure to make the necessary changes could see the company fined an additional 5 per cent of its total worldwide daily turnover.
The ruling is yet another major step by the European Union to reign in the power of big tech companies.
The Digital Markets Act was introduced to prevent dominant online platforms, known as “gatekeepers”, from abusing their market power to disadvantage competitors unfairly. The rules apply to some of the world’s biggest technology companies including Google, Apple, Meta, Amazon and Microsoft.
Google has already started testing changes to its search rankings and Play Store policies to address the Commission’s concerns.
The regulator also said it is examining the company’s plans for newer AI-powered search features, including AI Overviews and AI Mode, to see if they are compliant with the DMA.
The move comes as competition authorities become increasingly concerned about how artificial intelligence is being integrated into search engines and other digital services. With artificial intelligence moving to the forefront of Google’s product offerings, regulators are scrutinising whether new features continue to give the company an unfair edge over its competitors.
The latest fine for Google is the latest in a series of regulatory actions in Europe, where authorities have taken a leading role in policing the business practices of the world’s largest technology companies. It also shows the EU is ready to crack down hard on the Digital Markets Act as companies adjust to a fast-changing digital landscape.
