EU Says Google Search & Play Store Break Digital Markets Act

EU Investigates Google Over Potential Digital Markets Act Breaches

Preliminary investigations suggest that Google Search and its Play Store app marketplace may be in violation of the European Union’s Digital Markets Act (DMA), as announced by EU Commission enforcers on Wednesday. These enforcers have been examining the company’s practices for several months.

DMA Applicability and Initial Scrutiny

The DMA applies to a select group of major technology companies, including Alphabet – Google’s parent organization. EU authorities began scrutinizing various facets of Google’s operations in March 2024, shortly after the regulation took effect.

Violations confirmed under the DMA can result in penalties reaching up to 10% of a company’s global annual revenue, making the situation critical for Google. However, it is important to recognize that the EU has not yet finalized its assessment.

Concerns Regarding Google Search

The EU’s initial findings center on two key areas. The first relates to Google Search, where investigators believe Google is prioritizing its own services over those of competitors, a practice prohibited by the DMA – known as self-preferencing.

According to the EU, “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.”

Specifically, Google is accused of providing its own services with more prominent placement, enhanced visual presentation, and advanced filtering options compared to rival offerings.

Play Store Practices Under Review

The second area of concern involves Google’s mobile app marketplace, the Play Store. The EU suspects Google of hindering app developers’ ability to direct consumers to alternative channels offering better deals, outside of Google’s control.

The Commission stated that “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.”

Furthermore, the EU contends that the fees Google charges developers are excessive and maintained for an unreasonably long duration, even for digital goods and services.

Previous Actions and Broader Enforcement

The EU previously penalized Apple with a €1.84 billion fine for unfair steering rules related to music streaming on iOS, predating the DMA. Preliminary findings against Apple’s App Store for DMA breaches were also issued last summer.

These findings regarding Google align with broader DMA enforcement efforts against other tech giants, though final decisions are still pending in all cases.

Google’s Response and Industry Criticism

Despite implementing changes to its search engine and the Play Store in response to the DMA, the EU believes these adjustments are insufficient. Competitors have voiced concerns that Google’s modifications are attempts to circumvent the DMA’s self-preferencing ban.

They argue that Google is developing new strategies to leverage its search dominance and unfairly compete with their services.

EU Commission’s Statement

Teresa Ribera, the Commission EVP responsible for competition, emphasized the importance of ensuring Alphabet’s compliance with EU regulations concerning Google Search and Android phones.

She stated that the preliminary view is that Alphabet is breaching the DMA by favoring its own products in Google Search results, and by not effectively allowing Android users to access cheaper offers from app developers outside the Google Play Store.

Ribera affirmed the Commission’s commitment to fostering a culture of DMA compliance, while upholding fair and non-discriminatory application of the law.

Google’s Counterarguments

Google responded by asserting that the changes mandated by the EU will negatively impact consumers and businesses, and “hinder innovation.”

Oliver Bethell, Google’s senior director of Competition, claimed that the required changes to search results will make it more difficult for users to find information and reduce traffic to European businesses.

Google also warned that EU enforcers are pushing for changes to the Play Store that could expose users to “malware and fraud from bad apps.”

Bethell argued that restricting Google’s ability to protect users from malicious links or charge reasonable fees would jeopardize the open Android platform and its continued development.

Next Steps and Potential Outcomes

Google will have the opportunity to review the EU’s findings and submit a response. The investigation’s outcome remains uncertain, with potential outcomes including a non-compliance decision and a substantial fine.

Alternatively, the Commission could be persuaded by Google’s defense or by external political pressures.

• DMA: Digital Markets Act
• EU: European Union