The European Commission has penalized global tech firm Google [Alphabet] (NASDAQ:GOOG) under the Digital Markets Act (DMA) for the transgression of allegedly preferencing its own services on search over competitors. Google has been fined €890 million (over $1 billion). The EU claims that Google obfuscated alternative or potentially cheaper services from users.
Google was previously notified that it may be out of compliance within the EU in March of 2025.
The DMA requires big tech not to treat their own services more favorably when being ranked and must provide “fair and non-discriminatory conditions to such ranking.”
The European Commission has ordered Google to alter its operations; specifically, Google must implement measures to:
- Treat third-party services that feature on Google’s search results in a fair and non-discriminatory manner by reference to its own services, and
- Allow app developers distributing their apps via Google Play Store, both technically and contractually, to freely communicate, promote offers and conclude contracts with users not only within but also outside the Google Play app store.
Google is required to comply with the EU’s demands within 60 days; otherwise, penalty payments will rise by up to 5%.
Teresa Ribera, Executive Vice-President for Clean, Just and Competitive Transition at the Commission, said Google has fallen short of compliance under the DMA.
“Today we have taken decisive yet balanced enforcement action sanctioning these breaches. The best products should succeed because they’re better, not because they’re owned by the company running the search engine. And European consumers have a right to be told by app developers where to sign up to the best offers, even when the app store owner does not get a cut. This is the promise of the DMA, protecting fairness, choice and innovation in digital markets for the benefit of all European citizens.”
Google has responded to the EU’s claims, stating that the DMA would break everyday products and that, to comply, they must remove search features Europeans use.
“This isn’t fair competition; it’s 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 Trump administration views the DMA as a trade barrier that discriminates against US tech firms. Some Republicans in Congress have called on the White House to take action against the DMA as it is a form of “economic extraction” and a “regulatory coercion” technique.
In the US, there is a meme circulating that states the US innovates, the EU regulates, (and China steals). This is part of a perspective by some that because Europe is unable to create an innovation-driven economy, it seeks to fund its services by taxing or penalizing successful US firms.
