Google has been charged by the European Union with violating antitrust rules under the Digital Markets Act (DMA). The charges are made in relation to two main offenses. Google is first accused of providing privileged treatment to its own products such as Google Shopping, Google Hotels, and Google Flights over third-party products in search results. In this approach, competitor comparison services are accused of being deprived of chances of fair visibility.
Secondly, the EU alleges that Google is restricting app developers on its Google Play Store from directing users to other distribution channels. This is seen as a breach of anti-steering provisions in the DMA. The EU’s preliminary findings are that Alphabet, Google’s parent company, is technically preventing app developers from directing consumers freely to other platforms for better terms. Additionally, Google’s commission charges it imposes on acquiring the first-time purchase of new customers via Google Play are also found to be astronomical.
Google can appeal the European Commission’s decision before a final verdict. Google may be penalized up to 10% of its global yearly revenue, which would be approximately $35 billion if calculated based on Alphabet’s 2024 revenue.
Google has responded to these allegations, arguing that the EU’s planned changes to its search capabilities are misguided. The adjustments, according to Google, will complicate the process of users finding relevant information and redirect traffic away from European businesses. Google’s senior director of competition, Oliver Bethell, further argued that if Google is unable to provide flight results that connect directly to airlines’ websites, passengers may end up paying extra for flights in the form of commission from intermediary platforms.
EU antitrust chief Teresa Ribera claimed that the actions are aimed at forcing Alphabet to adhere to EU regulations for Google Search and Android devices. The move is part of a broader surge in Big Tech crackdowns by the EU to rein in their grip on markets.
Google has a history of antitrust issues with the EU, having been required to pay over €8 billion in previous cases. The new charges reflect the strains between the EU and U.S. technology giants, with the U.S. government grumbling about the impact of EU regulation on American companies.
The DMA, which will take effect in 2023, targets big digital platforms, known as gatekeepers, to ensure fair competition and innovation in the digital economy. The enforcement of the rules by the EU is a giant leap towards Big Tech regulation and promoting a more competitive digital economy.
As a counter to the accusations, Google has worried that the EU laws would harm businesses and consumers alike. Google argues that the firm’s services have assisted in creating Europe’s digital economy and that the new amendments would undo the gains made.
The early reports by the EU indicate the ongoing challenge for technology giants to cope with evolving regulatory landscapes. As the EU continues to enforce tougher antitrust rules, Google and other firms must adjust to these changes to prevent hefty financial fines and remain in business.
