‘The best brands should succeed because they are better, not because they belong to the company that runs the search engine,’ said Teresa Ribera of the EU in today’s decision.
The European Commission has fined Google €890m for breaching the bloc’s Digital Markets Act (DMA) over Google Search and the Google Play app store.
Google was issued with two fines today (23 July) – one for choosing its services in Google search and one for preventing app developers from directing consumers to other shopping channels on Google Play.
The two fines are worth 460 million euros and 430 million euros respectively.
“The best brands should succeed because they are better, not because they belong to the company that owns the search engine,” said Teresa Ribera, vice president of the European Commission for a clean, fair and competitive transition.
“And European consumers have the right to be told by app developers where to sign up for the best offer, even if the owner of the app store is cut off. This is the promise of the DMA, to protect fairness, choice and innovation in digital markets for the benefit of all European citizens.”
Under DMA rules, companies designated as gatekeepers must not conduct their own services in a manner superior to the services of third parties.
After an investigation, the Commission decided that Google does not meet this obligation, saying that the company gives “special treatment” to its services, which include shopping, hotels, transportation and sports results, than that of third parties in Google Search.
“Google displays its services that stand out in the search results, including at the top of the search results page or by using advanced displays and filters, while similar third-party services do not have the same prominence,” reads a statement issued by the Commission to the press.
The DMA also requires Google to allow app developers who distribute their apps through the Google Play Store to inform customers – for free – of other, often cheaper, offers and direct them to other channels (such as websites and third-party app stores) to make those purchases.
The commission found that Google prevents app developers from doing this freely, and added that although Google can receive money to help an app developer acquire a new customer through Google Play, “the level of payments related to supervision. charged by Google and duration of charging because these funds exceed what is considered to be compatible with the DMA”.
Apple was fined €500m under the DMA for a similar anti-trust practice last year.
Google will now be required to fix the DMA violation in two steps.
First, the US tech giant must treat third-party services that appear in Google search results “in a fair and non-discriminatory manner with reference to its services”.
Google should also allow app developers who distribute their apps through Google Play – both technically and contractually – “to communicate freely, promote offers and conclude agreements with users not only inside 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 with this window, the company risks being hit with penalty payments of up to 5pc of its global turnover.
“The two decisions we adopted today confirm our determination to use the Digital Markets Act to protect business and innovation,” said Henna Virkkunen, senior vice president for technology, security and democracy at the European Commission. “Google must now end the non-compliance and refuse to continue it in the future.
“Today’s decisions send a clear message: we will not hesitate to use our tools to protect the business and innovation opportunities opened up by the DMA.”
SiliconRepublic.com has reached out to Google for comment on today’s decision.
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