The European Commission has levied a €890 million fine against Google for breaching the Digital Markets Act (DMA), the most significant penalty yet under the EU’s tech rules.
The Commission found Google systematically violated its obligations as a designated gatekeeper by engaging in two distinct anti-competitive practices that distorted competition and harmed European consumers and businesses alike. The violations are in search results and anti-competitive practices in its app store, and both receive a single fine that, cumulatively, make up the €890 million penalty the Commission is requesting Google pay.
The first violation has been fined €460 million and concerns Google’s self-preferencing practices in its search results. The Commission found that Google consistently gave preferential treatment to its own services, like Google Shopping, Google Flights, and other vertical search services, over those of third-party competitors. Google’s own services featured more prominently at the top of search results and had enhanced visuals not available to competitors, appealing to consumers in ways competitors couldn’t match. This created an uneven playing field where Google could leverage its dominance in general search to unfairly advantage its specialised services.
The second violation, fined at €430 million, involved Google Play, Google’s app store for its devices and services. Under the DMA, app developers need to inform customers about alternative offers and point them to those offers, even outside of Google Play. However, Google’s steering-related fees and the extended charging period for these services exceeded what is permissible under the DMA, therefore locking developers and consumers to Google’s services, limiting choice and artificially inflating prices.
Despite the sharp fine, the Commission wanted to emphasise that its primary objective is behavioural change rather than maximum punishment. The Commission is more interested in changes being integrated than actual fines. To this end, the fine is actually lower than the threshold theoretically possible under the DMA, which allows for 10% of global turnover for Google’s parent company, Alphabet.
“This is the promise of the DMA, protecting fairness, choice and innovation in digital markets for the benefit of all European citizens,” said Teresa Ribera, Executive Vice-President of the Commission.
Google now has 60 days to implement the changes required in its search ranking practices and app store policies, with potential daily fines of up to 5% of Alphabet’s global turnover for continued non-compliance.
