EU fines Google $US1bn over Search and Play Store

The European Commission has fined Google €890 million (about $1.6 billion) and ordered changes to Search rankings and Play Store rules, giving the company 60 days to comply. The decision hits two of Google’s largest distribution channels and is one of the biggest penalties yet under the Digital Markets Act.

Brussels divided the penalty into €460 million (about $830 million) for Search and €430 million (about $780 million) for the Play Store. In its announcement, the Commission said Google must make operational changes, not simply pay the fine, and warned it could face periodic penalty payments if the response falls short.

On Search, the Commission said Google gave its own comparison-shopping, hotel, flight and financial services better placement than rival products. Regulators said the advantage appeared in both ranking and display, making competing services harder to find even when users were searching for the same information. It is the self-preferencing argument Brussels has tested against Google for years, now written into a DMA order.

The Play Store finding centred on steering. The Commission said Google restricted app developers from directing users to cheaper offers outside the store, while still charging fees on some purchases made away from Google’s billing system. That store design affects whether a user sees another payment path at all, which is why Brussels framed it as a competition problem rather than a narrow billing dispute.

European Commission executive vice-president Teresa Ribera put the case in plain competition terms in comments carried by Fast Company / AP: “The best products should succeed because they’re better, not because they’re owned by the company running the search engine.”

Google said it would appeal. Kent Walker, the company’s president of global affairs, told Fast Company / AP the ruling risked “product degradation driven by a small group of self-serving complainants”. The company is likely to argue that forced changes could make Search less useful or the Play Store less secure, a line it has used in earlier European competition fights.

Why the decision matters

The order matters because it tells Google what Brussels expects to change. For Search, a dominant search engine cannot give its own vertical services an advantage in ranking or presentation when competitors offer the same function. For the Play Store, developers must be allowed to promote alternative deals without store rules or pricing restraints blocking the message. Those remedies put product design, not only conduct, inside the DMA fight.

The fine also comes weeks after a European court upheld a separate $US4.1 billion (about $6.3 billion) antitrust penalty tied to Android, a case that has shadowed Google’s mobile business for years. As WIRED reported, the new decision keeps Brussels focused on the same question across products: whether a platform that controls a gateway can preference itself and limit rivals at the point of discovery.

Australian developers, competition lawyers and policy watchers are likely to study the remedy model more closely than the headline number. Brussels has bundled search placement and app-store steering into one enforcement action, at a time when governments are debating how much leverage digital gatekeepers should hold over smaller businesses. Google now has two months to offer changes the Commission accepts as real. If it cannot, the case shifts from a fine to a fight over the details of how Search and the Play Store work.