Google Search and its Play Store app marketplace are allegedly violated the European Union's Digital Markets Act (DMA) in accordance with preliminary findings released on Wednesday by the EU Commission executive of BLOC's flagship market contestability law, which has been under investigation for several months.
DMA applies to a small number of high-tech majors that include the alphabet (Google's parent). Google's business side has been under investigation by the EU since March 2024, shortly after the administration came into effect.
A confirmed violation of DMA will likely attract sanctions of up to 10% of global annual revenue, which will lead to a higher interest in Google. However, it is important to note that the EU has not yet reached a final conclusion about this probe.
There are two preliminary findings from the EU on Google. One is related to Google search. Here, the commissioner believes that Google is in breach of the DMA's requirement that it does not treat its services more favorably than its rivals.
“Alphabet treats its own services, including shopping, hotel bookings, transportation, financial and sports results, more favorably in Google search results than similar services offered by third parties,” the EU wrote in a press release.
“More specifically, Alphabet offers a more prominent treatment for its unique services compared to other services by displaying them at the top of Google's search results or in a dedicated space with a visual format and filtering mechanism.”
The second finding is about the Play Store, Google's mobile app marketplace, where the EU suspects that Google is violating DMA by preventing app developers from freely maneuvering to other channels not controlled by Google for better offers.
“The alphabet technically prevents certain aspects of steering by preventing app developers from piloting customers into their chosen offers and distribution channels,” the committee wrote.
“Alphabet can receive fees to facilitate the initial acquisition of new customers by app developers through Google Play, but the fees that Alphabet is charged exceed what is justified. For example, Alphabet charges high costs over an excessively long period of time for each purchase of digital goods and services,” he added.
The EU previously targeted Apple over unfair steering rules, and after a long-term competitive investigation into the music streaming market for IOS, which preceded the DMA, it was a year ago with a huge iPhone fine of 1.844 billion euros.
Additionally, Google's business findings will follow other DMA enforcement measures against other tech giants, as they published preliminary investigations against Apple's App Store last summer on violations of DMA regulations. However, in all cases, the EU has not yet reached a final decision.
Google has made a series of changes to the way the EU search engines and Play Store operates in response to the DMA's in effect, but the committee does not believe these have progressed well.
Aggregation and search sites that compete with Google have been particularly vocal in complaining that it corresponds to an attempt by the search giant to avoid a DMA ban on self-expression. They said Google is using its advantage in searches to devise new ways to unfairly compete with their products.
Commenting on the EU's preliminary findings in the statement, Teresa Ribera, EVP of Competitive Affairs, said:
“In the first case, Alphabet is violating the digital market by endorsing its own product on its Google search results page. This means that suppliers and competitors do not benefit from fair ranking practices. In the second case, Alphabet does not effectively allow Android phone users to be offered outdoors by Google Developers of Google salespeople.
“Let's be clear. Our main focus is to create a culture of compliance with digital market laws,” Rivera added. “The non-compliance procedure is reserved for situations where the attempted dialogue has not been successful. However, as always, we apply our laws in a fair and non-discriminatory manner and fully respect the rights of the parties' defense.”
I contacted Google and asked if they would make any changes to how the business is run in the EU following the committee's findings. Company spokespersons were not involved in our questions. She instead pointed out a blog post that was released in line with the announcement of the EU's preliminary violation investigation results.
In the blog post, the company argues that changes forced by the EU hurt consumers and businesses, “stopping innovation.”
“The committee's findings need to make more changes to how certain types of search results are displayed, making it difficult for people to find what they're looking for and reduce traffic to European businesses.”
Bethell also warned that EU enforcers are pushing for changes to be exposed to “malware and scams from bad apps” on Google's Play Store.
“[I]fWe cannot protect users from fraudsters and malicious links that take users outside of a safe playing environment. The committee effectively enforces the choice between a closed model or an unsafe model,” Bethel argues.
“Similarly, if we can't charge reasonable fees to support the ongoing development of Android and the development of the play services we offer, we cannot invest in an open platform that will bolster billions of phones around the world.
“We will continue to engage with the committee and follow the rules. However, today's findings raise the risk of worse experiences for Europeans,” Bethel added.
In terms of what happens next, Google has the opportunity to analyze EU findings in detail and formulate the response. Therefore, the results of the survey remain unseen. Non-compliance decisions (and large fines) are possible if the EU ends up confirming a preliminary view that the tech giants do not follow the rules. Similarly, the committee could be dependent on the material Google places in its defense.
Or, certainly, by the political pressures brought about from the Atlantic to endure the rule of law in Europe.