The European Commission has fined Google €890 million ($1.01 billion) after it determined the search engine giant had breached the Digital Markets Act (DMA). The two decisions, announced July 23, cited Google’s non-compliance by, first, self-preferencing its own services on Google Search and, secondly, for putting in place restrictions on businesses to direct consumers to alternative, often cheaper, purchase channels on Google Play (a practice known as steering).
The Commission, the executive arm of the European Union, issued Google fines of €460 million and €430 million respectively.
“The best products should succeed because they're better, not because they're owned by the company running the search engine,” said Teresa Ribera, executive vice president for clean, just and competitive transition at the European Commission, in a statement. “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.”
“Today’s decisions send a clear message: We will not hesitate to use our tools to safeguard business and innovation opportunities opened up by the DMA,” added Henna Virkkunen, executive vice-president for tech sovereignty, security and democracy.
The New York Times says the decision is likely to intensify trans-Atlantic trade tensions, just as President Donald Trump is preparing a new batch of tariffs on the European Union and other major trading partners to replace import duties deemed in February to be illegal, and a blanket 10% rate that legally expires July 24.
The U.S. administration has slammed attempts by European countries and the U.K. to rein in the arguably monopolistic power of giant tech and e-commerce titans. In June, Trump threatened a 100% tariff on European countries that impose digital service taxes on American corporations. DSTs levy taxes on a company’s income depending on where its digital services were provided, regardless of whether it has a physical base in that country. France introduced a DST in 2019, and the Paris-based global economic policy forum Organisation for Economic Cooperation and Development (OECD) is pushing a whole new tax structure that includes similar taxes.
The EU has penalized what it considers misbehavior by Chinese companies, too. Alibaba’s AliExpress was fined the equivalent of $629 million earlier in July for the sale of illegal, unsafe and counterfeit products on its platform. And, in February, TikTok, owned by ByteDance, was told to make changes to make its service less addictive.
The Google fines are just the latest in a string of penalties enacted on the company by the European regulators in the last few years. The company has been fined more than €10 billion since 2017.
The Times points out that the fine is small compared with Google’s profits; its parent company, Alphabet, on July 22 reported a quarterly profit of $112.1 billion.
