Alan North
Google Search and its Play Store app marketplace are suspected of breaching the European Union’s Digital Markets Act (DMA), per preliminary findings announced Wednesday by EU Commission enforcers of the bloc’s flagship market contestability law, who have been investigating the company for months.
The DMA applies to a handful of tech giants, Alphabet (Google’s parent) included. Aspects of Google’s business have been under investigation by the EU since March 2024, shortly after the regime came into force.
Confirmed violations of the DMA can attract sanctions of up to 10% of global annual turnover, so the stakes are high for Google. However, it’s important to note that the EU has not reached a final conclusion on this probe as yet.
The EU’s preliminary findings on Google are two-fold: One relates to Google Search, where Commission enforcers believe Google is breaching the DMA’s requirement not to treat its own services more favorably than rivals’ — the DMA bans self-preferencing.
“Alphabet treats its own services, such as shopping, hotel booking, transport, or financial and sports results, more favourably in Google Search results than similar services offered by third parties,” the EU wrote in a press release.
“More specifically, Alphabet gives its own services more prominent treatment compared to others by displaying them at the top of Google Search results or on dedicated spaces, with enhanced visual formats and filtering mechanisms.”
The second finding concerns Google’s mobile app marketplace, the Play Store, where the EU suspects Google to be breaching the DMA by preventing app developers from freely steering consumers to other channels that aren’t controlled by Google for better offers.
“Alphabet technically prevents certain aspects of steering, for instance, by preventing app developers from steering customers to the offers and distribution channels of their choice,” the Commission wrote.
“Whilst Alphabet can receive a fee for facilitating the initial acquisition of a new customer by an app developer via Google Play, the fees charged by Alphabet go beyond what is justified. For example, Alphabet charges developers a high fee over an unduly long period of time for every purchase of digital goods and services,” it added.
The EU has previously targeted Apple over unfair steering rules, fining the iPhone giant €1.84 billion a year ago following a long-running competition investigation of the music streaming market on iOS which predated the DMA.
It also issued preliminary findings against Apple’s App Store for breaches of the DMA provisions last summer, so the findings pertaining to Google’s business follow other DMA enforcement actions against other tech giants. Though, in all cases, the EU has yet to reach final decisions.
While Google has made a series of changes to how it operates search and Play in the EU in response to the DMA coming into force, the Commission does not believe these have gone far enough.
Aggregation and search sites that compete with Google have been particularly vocal in complaining that the company’s changes amounted to an attempt to circumvent the DMA ban on self preferencing by the search giant devising new ways to use its dominance in search to unfairly compete with their offerings.
Commenting on the EU’s preliminary findings in a statement, Teresa Ribera, the Commission EVP in charge of competition matters, said: “The two preliminary findings we adopt today aim to ensure that Alphabet abides by EU rules when it comes to two services widely used by businesses and consumers across the EU, Google Search and Android phones.
“In the first case, our preliminary view is that Alphabet is in breach of the Digital Markets Act by favouring its own products on the Google Search results page, which means suppliers and competitors do not benefit from fair ranking practices. In the second case, we take the preliminary view that Alphabet does not effectively allow Android phone users to be told about or directed to cheaper offers from app developers outside the Google Play store.”
Added Ribera: “Let me be clear: Our main focus is creating a culture of compliance with the Digital Markets Act. Non-compliance proceedings are reserved for situations where attempts at dialogue have not been successful. But as always, we apply our laws in a fair and non-discriminatory way, and fully respect parties’ rights of defence.”
We reached out to Google to ask whether it will be making any changes to how it operates its business in the EU following the Commission’s findings. A company spokeswoman did not engage with our question — pointing instead to a blog post it released to coincide with the EU’s announcement of preliminary breach findings.
In the blog post the company lays into the DMA — claiming that changes that are being forced on it by the EU will hurt consumers and businesses, and “hinder innovation”, as it puts it.
“The Commission’s findings require us to make even more changes to how we show certain types of Search results, which would make it harder for people to find what they are looking for and reduce traffic to European businesses,” claimed Oliver Bethell, Senior Director, Competition, Google, in the post.
Bethell also warned that EU enforcers are pushing changes on Google’s Android Play Store that will expose Europeans to “malware and fraud from bad apps”.
“[I]f we can’t protect our users from scammy or malicious links that take our users outside of the secure Play environment, then the Commission is effectively forcing us to choose between a closed model and an unsafe one,” Bethell contends.
“Similarly, if we can’t charge reasonable fees to support the ongoing development of Android and the Play services we offer, then we can’t invest in an open platform that powers billions of phones around the world, helping not just those who can afford to spend 1000 Euros on the latest premium model.”
Bethell added: “We will keep engaging with the Commission and comply with its rules. But today’s findings now increase the risk of an even worse experience for Europeans.”
In terms of what happens next, Google will have a chance to parse the EU’s findings in detail and formulate a response. The outcome of the investigation thus remains to be seen — a non-compliance decision (and a big fine) are possibilities, if the EU ends up confirming its preliminary view that the tech giant is not abiding by the rules. Equally, the Commission could be swayed by the material Google puts up in its defense.
Or, indeed, by the political pressure that’s being brought to bear on Europe’s rule of law from over the Atlantic.
