EU fines Google €890m over search and app store practices

‘The best products should succeed because they’re better, not because they’re owned by the company running the search engine,’ said the EU’s Teresa Ribera on today’s decisions.

The European Commission has hit Google with €890m in fines for breaching the bloc’s Digital Markets Act (DMA) through Google Search and the Google Play app store.

Google was issued two fines today (23 July) – one for self-preferencing its own services on Google Search and the other for preventing app developers from directing consumers to alternative purchase channels on Google Play.

The two fines are to the value of €460m and €430m 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, the European Commission’s executive vice-president for clean, just and competitive transition.

“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.”

Under DMA rules, companies designated as gatekeepers must not treat their own services more favourably in ranking than third-party services.

After an investigation, the Commission determined that Google does not meet this obligation, stating that the company gives “preferential treatment” to its own services, including shopping, hotels, transport and sports results, over those of third parties in Google Search.

“Google displays its own services more prominently in search results, including at the top of the search results page or by using enhanced visuals and filters, while similar third-party services do not have the same prominence,” read a statement from the Commission’s press release.

The DMA also requires Google to allow app developers that distribute their apps through the Google Play store to inform customers – free of charge – of alternative, often cheaper, offers and to direct them to alternative channels (such as websites and third-party app stores) to make those purchases.

The Commission found that Google prevents app developers from freely doing this, and added that while Google can receive a fee for facilitating the initial acquisition of a new customer by an app developer via Google Play, “the level of the steering-related fees charged by Google and the length of the charging period for these fees went beyond what is considered compliant with the DMA”.

Apple was fined €500m under the DMA for the same anti-steering practice last year.

Google will now be required to rectify the DMA breaches through two measures.

First, the US tech giant must treat third-party services that feature on Google’s search results in a “fair and non-discriminatory manner by reference to its own services”.

Google must also allow app developers distributing their apps via Google Play – 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 Commission’s decisions within 60 days. If it does not comply within this window, the company risks being hit by periodic penalty payments of up to 5pc of its total worldwide turnover.

“The two decisions we adopted today confirm our determination to apply the Digital Markets Act to safeguard business and innovation,” said Henna Virkkunen, executive vice-president for tech sovereignty, security and democracy at the European Commission. “Google must now bring the non-compliance to an end and refrain from continuing it in the future.

“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.”

SiliconRepublic.com has reached out to Google for a comment on today’s decisions.

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