EU Fines Google for Violating Digital Markets Act With Search Engine, App Store Practices

A day before President Donald Trump was expected to announce new trade tariffs on the European Union, the bloc's regulators on Thursday announced it had fined Google for anticompetitive business practices related to its search engine and app store.

Google has violated the Digital Markets Act (DMA), said the European Commission, by giving priority to its own services in search results and by preventing app developers from steering customers to cheaper products or app stores other than Google's Play Store.

The commission fined Google €460 million ($524 million) for its breach of search engine rules and €430 million ($490 million) for the app store violation, bringing the total fine to more than $1 billion—a fraction of the tech giant's assets. The fine was announced a day after Google parent company Alphabet reported a quarterly profit of $112.1 billion.

Brussels-based journalist Dave Keating quoted Alexandra Geese, a member of European Parliament representing the Green Party, as saying that "the size of this fine is disappointing and bears no relation to the damage Google has done to the European economy."

"Plenty of people would dodge the fare if the fine were cheaper than the ticket," said Geese.

The fine comes weeks after the European Court of Justice upheld a $4.67 billion fine from 2018 over the unfair advantage it gave to its own apps by pre-installing the apps on smartphones.

Teresa Ribera, the commission's executive vice president for a clean, just, and competitive transition, said Thursday that the DMA promises protections for "fairness, choice, and innovation in digital markets for the benefit of all European citizens.”

“The best products should succeed because they’re better, not because they’re owned by the company running the search engine,” said Ribera.

Kent Walker, Google's president of global affairs, claimed the fine would cause "product degradation" and said the company is evaluating a possible appeal.

The fine, he said, will force Google "to strip away real-time search features Europeans love—like instant pricing and direct availability for hotels, flights, and restaurants—and dismantle safety protections on Google Play."

The company has 60 days to comply with the penalty and could face further fines of up to 5% of its global revenue if it fails to do so.

Google has been fined more than $10 billion euros by the EU for anticompetitive behavior since 2017.

Ribera called on the company to return to the negotiating table with European regulators to determine its full compliance with the DMA.

“It is quite a strong message to Google to say: We expect from you a serious proposal in terms of compliance,” she said. “The intention of our regulation is to ensure well-functioning markets, not to punish anyone. But, of course, in certain cases, we need to come up with sanctions.”

The fine was announced hours before Trump's tariffs against 60 countries were set to expire; the president has threatened new tariffs against the European Union in retaliation for what he and Republican lawmakers view as unfair targeting of US tech companies.

But Ribera told reporters that the European Commission is "bound by the law" and announced the fine despite fears in the EU that Trump could retaliate with higher tariffs than the ones he levied last year.

“I don’t think that any of us being part of the Commission could be respected," said Ribera, "if we could decide whether to do or not to do because someone else is trying to tell us what to do.”