The European Commission has published two decisions finding that Google has not complied with the Digital Markets Act (DMA) because it treated its own services preferentially on Google Search, and placed restrictions on businesses in place to direct consumers to alternative, often cheaper purchase channels on Google Play.
The Commission has issued respective fines of €460 million and €430 million for the breaches.
Under the DMA, gatekeepers like Google must not act preferentially towards their own services in ranking than third-party services and must apply transparent, fair and non-discriminatory conditions to such ranking. The Commission has found that Google has given preferential treatment to its own services, such as shopping, hotels, transport and sports results, over those of third parties in Google Search. This is a breach of its obligations under the DMA. Google also displays its own results more prominently in search including at the top of the search results page, or by using enhanced visuals and filters, while similar third-party services are not treated with the same prominence.
In addition, under the DMA, app developers distributing their apps via Google Play should be able to tell customers about alternative, often cheaper offers, and direct them to those offers to make purchases, for example on other websites or alternative app stores (steering). The Commission has found that Google has failed to comply with this obligation and prevents apps from freely communicating, promoting offers and concluding contracts with users in their chosen distribution channels, such as third-party app stores. Google is able to receive a fee for facilitating the initial acquisition of a new customer by an app developer of Google Play. However, the level of steering-related fees charged by Google and the length of the charging period for these fees has been judged as beyond what is compliant with the DMA.
To ensure future compliance, the Commission has first instructed Google to treat third-party services that feature on Google’s search results in a fair and non-discriminatory manner relative to its own services. Second, Google must implement measures to allow app developers distributing apps via the Google Play Store, technically and contractually, to freely communicate, promote offers and conclude contracts with users both within and outside the Google Play Store.
Google has proposed and started testing changes in how it presents its own services on Google search for services such as shopping, hotels and flights. The implementation of these solutions which constitute substantial progress towards compliance will be monitored by the Commission. Google has also started testing changes in how it presents shopping ads and content related services such as sports. The Commission is assessing the changes and how Google plans to deal with AI Overviews and AI mode. Google has also rolled out changes related to Google’s steering terms.
Google is required to comply with the Commission’s decisions within 60 days.
