By Samuel Stolton
Google is bracing for another attack from European Union watchdogs, paving the way for a hefty fine and an order to change its business model unless the US giant takes swift action to give more prominence to rivals in its sprawling search empire.
EU officials are preparing a formal charge against Alphabet Inc.’s unit under the bloc’s Digital Markets Act, which focuses on how the company displays results for rival products on its various search services, such as Google Flights and Google Hotels. The company could face hefty penalties of up to 10% of global annual revenue if it fails to comply with the rules.
The EU’s preliminary findings could be made public before the end of October, according to people familiar with the matter who spoke on condition of anonymity. The people added that the deadline could be pushed back because of an upcoming turnover of senior officials at the European Commission, and that Google still has time to allay the EU authority’s concerns. A final decision on the case is expected before the end of March next year.
Google lawyers met behind closed doors with European Commission officials this week in an attempt to ease the watchdog’s concerns about compliance. One proposal floated by the firm includes introducing a new design to Google’s search tabs, which would give users the option to navigate to alternative search platforms or to direct providers such as hotel and airline websites, according to other people familiar with the matter.
A Google spokesman said the company had tried to balance the needs of different types of websites while respecting user choice. The commission in Brussels declined to comment.
The EU’s landmark DMA sets out a series of recommendations and warnings for some of the world’s largest tech platforms. The upcoming warning comes on the heels of a major court victory by the commission against abusive behavior at Google Search. Last week, the Mountain View, California-based company lost its court bid to overturn a record €2.4 billion ($2.7 billion) fine over EU allegations that it had abused its monopoly power to crush rival shopping services. This week, the company had more success, managing to overturn a €1.5 billion EU fine for thwarting online ad competition, in a dispute over behavior the firm says ended in 2016.
The procurement case was one of four that have been at the heart of EU competition chief Margrethe Vestager’s efforts to crack down on the growing power of big tech companies. She has so far fined Google more than €8 billion and has also echoed the US Justice Department’s suggestion that Google’s ad tech business should be broken up. Vestager is nearing the end of her decade-long EU tenure and will soon be replaced by Spain’s Teresa Ribera.
Google is joining Apple Inc. and Meta Platforms Inc. in facing formal complaints from the DMA. The bloc first criticized Apple’s app store rules in June, then issued a warning about Meta’s subscription model for ad-free services on Instagram and Facebook. Just this week, Apple came under pressure to make changes to its iPhone operating system to comply with the rules.
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First published: September 20, 2024 | 11:45 PM IS
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