EU fines Google $1 billion over competition rules

Alphabet’s Google has been handed €890 million, or about $1 billion, in fresh European Union fines over practices regulators say tilted the market in its own favour, but the company may have bought itself some breathing room as officials described the compliance talks as constructive. According to the European Commission, the penalties were issued under the Digital Markets Act, the bloc’s landmark law designed to curb the market power of the biggest digital platforms. One fine of €460 million relates to Google’s conduct in search, where the Commission said the company gave preferential treatment to its own services in areas such as shopping, hotels, transport and sports results. A second fine of €430 million concerns restrictions in Google Play, with regulators saying app developers were prevented from steering users free of charge toward cheaper offers outside Google’s app store. The new penalties are the first Google has faced under the DMA, but they are far from the first competition sanctions the company has encountered in Europe. Reuters reported that the latest action brings Google’s total EU fines to €10.38 billion over nearly two decades, underlining how persistent the bloc’s scrutiny of Big Tech has become. For Brussels, the case is also about principle. EU antitrust chief Teresa Ribera said the commission’s duty was to ensure the laws are respected, while EU tech commissioner Henna Virkkunen said the DMA is meant to create a fair and level playing field. The comments suggest regulators are trying to show that enforcement will continue even as the EU faces US criticism and the threat of retaliatory tariffs. At the same time, the Commission’s tone on Google’s current compliance efforts was notably less confrontational than the headline fines might suggest. Officials said the company has made good progress in discussions over how it is adapting to the DMA, which raises the possibility that additional penalties may be avoided if the changes satisfy regulators. That makes the next 60 days important. The Commission has ordered Google to comply by treating rivals in a fair and non-discriminatory way and by allowing app developers to direct users away from Google Play to alternative offers. If Brussels decides the changes are still inadequate, the company could face more enforcement action. Google has pushed back, criticising the EU’s findings and saying it may challenge the decisions in court. The company has also indicated that complying with the rules may require it to alter core parts of its business model, a reminder of the tension between competition policy and the way large platforms make money. For users, the dispute may sound technical, but it could affect what appears in search results and how easily app developers can tell people about lower-priced options elsewhere. For rivals, the case matters because it goes to the heart of whether dominant platforms can still use their own ecosystems to steer traffic and transactions toward themselves. What remains unclear is how far Google will go in reshaping its services to satisfy the Commission and whether Brussels will consider those steps enough. The company’s legal challenge, if it comes, could also stretch the fight out well beyond the current deadline. For now, the EU has again shown that it is willing to punish Big Tech, even as it keeps the door open to compliance talks that could prevent the next round of fines.

Source: Dawn Home - https://www.dawn.com/news/2017814/google-hit-with-1bn-eu-fine-in-constructive-talks-to-avoid-more-penalties