In two decisions on 23 July, the European Commission found that Google had breached the EU’s Digital Markets Act (DMA). The issues in question relate to Google giving preferential treatment to its own services within its search engine and imposing restrictions on businesses that direct consumers towards alternative, often cheaper, purchases on Google Play (manual control).
As a result, the Commission has imposed two fines on Google, amounting to €460 million and €430 million respectively.
Under the Digital Markets Act, companies controlling access must not give their own services more favourable treatment than those of third parties. Instead, Google displays its own services more prominently – including search results for products, hotels, transport and sport – compared with third-party services in its search engine.
Such listings appear at the top of the search results page or feature better visual presentation or filters, which breaches the company’s obligations under the DMA.
Thérèse Ribère, the European Commission’s Executive Vice-President for a Clean, Fair and Competitive Transition, stated that the Commission had taken “decisive but balanced measures” in response to the company’s breach of the DMA.
“The best products should succeed because they are better, not because they belong to the company that runs the search engine. And European consumers have the right to receive information from app developers about where to subscribe to the best offers, even if the app store owner does not receive a share. This is the DMA’s promise, which safeguards fairness, choice and innovation in digital markets for the benefit of all European citizens,” explained Ribera.
Furthermore, under the DMA, app developers who distribute their products via Google Play must be able to inform users free of charge about cheaper alternatives and redirect them to these offers. The European Commission has concluded that Google is not complying with this requirement.
According to Genna Wirkkunen, Executive Vice-President of the European Commission for Technological Sovereignty, Security and Democracy, Google is harming businesses offering similar services, such as shopping or sports, by not giving them the same level of visibility in Google Search:
“We have also found that Google restricts app developers by offering cheaper deals to customers on the Google Play app store. Google must now cease its non-compliance and refrain from continuing such practices in the future. Today’s decisions clearly demonstrate that we will not hesitate to use our tools to protect the business opportunities and scope for innovation opened up by the Digital Markets Act.”
Google must comply with the European Commission’s decision within 60 days, otherwise it faces periodic penalty payments of up to 5 per cent of its total global turnover.
Kent Walker, Google’s President of Global Affairs, stated that the application of the DMA would spoil the user experience.
“This implementation of the DMA continues to disrupt the functioning of everyday products. To comply with the requirements, we are having to deprive Europeans of real-time search features, such as instant pricing and direct availability of hotels, flights and restaurants, as well as dismantling security measures on Google Play,” CNBC quoted Walker as saying.
He described the requirements as unfair competition. Google says it is reviewing the decision and assessing whether to challenge it.