The European Commission has dealt a very significant blow to Google this Thursday, challenging the United States at a delicate moment in trade relations across the Atlantic. Brussels is shaking up the American tech industry by imposing two fines totaling 890 million euros for violating the European Digital Markets Act (DMA). The sanctions could be a cause for anger in the White House, as the criticized Turnberry trade agreement is about to complete a year and while US President Donald Trump finalizes new tariffs due to the expiration of the 10% global levies he imposed after the Supreme Court annulled his previous tariff barriers in February.
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The first and highest of Google’s sanctions, amounting to 460 million euros, punishes the company’s practices of giving privileged visibility in its search engine to its own vertical services, such as Google Shopping, Flights, Hotels, and Trains, over competitors like Expedia. According to community technicians, by using these types of enhanced graphics or filters that allow direct booking on the results page, Google attracts consumers and hinders other external services, with potentially better offers, from having a fair chance of being found by the 482 million users the tech company has in the EU.
Against the DMA
Brussels believes Google privileges its services in its own search engine
The second fine is equally high, but slightly lower, at 430 million euros, and concerns Google’s so-called anti-steering restrictions. According to the Commission, Google prevents app developers from freely informing their users about alternative and cheaper offers outside the Google Play store. Community sources give the example of games where players buy “helmets or swords” for characters. “Normally, you have to do it within the app, but we want you to know that you can also buy them on the game’s website in other app stores, often at a better price,” they explain.
The investigation concluded that Google also charged excessive fees for redirecting customers and explicitly prohibited the use of external links or promotional messages. “The best products should succeed because they are better, not because they are owned by the company that manages the search engine,” summarizes Teresa Ribera, the Executive Vice-President of the Commission in charge of Competition. In contrast, Google and Alphabet’s President of Global Affairs, Kent Walker, has protested the decision, considering it not “fair competition” but “a product degradation driven by a small group of complainants with particular interests, whose broken dishes are being paid for by European businesses and consumers.”
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The fine is considered the highest to date in terms of total accumulated sanction against a single company under these regulations. However, if the two sanctions are analyzed separately, the Commission imposed another sanction on Apple in April last year for preventing developers from informing about cheaper offers, amounting to 500 million euros, thus higher than the 430 million that Google should pay.
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This is because the Commission considers that Apple’s infringement is ongoing because the company has not implemented sufficient changes, while Google, technicians indicate, is already beginning to introduce certain changes. Despite the millionaire figures, Google’s fine represents only 0.22% of its annual global turnover. Now, the company has two months to comply with Brussels’ demands or risk periodic payments of up to 5% of its revenue.
Trade Storm
A European delegation has recently traveled to Washington to prepare the ground
The announcement is expected to cause a strong earthquake in Washington and for the White House to want to respond against what it will consider an attack on its tech companies. To prepare the ground, a European delegation recently traveled to Washington to meet with the US Administration at a technical and political level, so it should not come as a surprise to the White House. The Commission also emphasizes that both the Apple and Google cases have parallels with open cases in the US where judges have reached similar conclusions about prohibiting companies from preventing developers from offering external payment options.
However, no one hides the concern that this issue could tip the stability of the trade agreement between the EU and the US that was signed in July last year. Especially when the sanction on Google coincides with the expiration of the 10% tariffs imposed by the always unpredictable Donald Trump. “We are ready to explain ourselves and dialogue,” community sources emphasize.
