Google faces EU ultimatum in new assault on search dominance

By Liam On Sep 20, 2024

3 min read Last updated: Sep 20, 2024 | 11:45 PM IST

By Samuel Stolton

Google is set to face another onslaught from European Union regulators, potentially resulting in a hefty fine and an order to change its business model unless the U.S. giant moves quickly to give its sprawling search empire more attention.

EU officials are preparing a formal charge sheet against Alphabet Inc.’s unit under the bloc’s Digital Markets Act, targeting the way the company displays competing product results across its various search services, such as Google Flights and Google Hotels. The company could face hefty fines of up to 10% of its global annual revenue if it fails to comply.

The EU’s preliminary findings could be released before the end of October, people familiar with the matter said, speaking on condition of anonymity. The people added that the timing could slip with the upcoming change of top officials at the European Commission, and that Google still has some time to address the EU authority’s concerns. A final decision in the case is expected before the end of March next year.

Google lawyers met behind closed doors with EU Commission officials this week in an attempt to assuage the watchdog’s concerns about compliance with the rules. One proposal from the company includes introducing a new design to Google’s search tabs that would give users the option to navigate to alternative search platforms or 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 still respecting user choice. The Brussels-based commission declined to comment.

The EU’s landmark DMA lays out a series of dos and don’ts for some of the world’s biggest tech platforms. The upcoming warning follows a major court victory for the commission against Google Search abuse. Last week, the Mountain View, California-based company lost its lawsuit to overturn a record €2.4 billion ($2.7 billion) fine over EU allegations that it abused its monopoly power to crush rival shopping services. This week, the company had more success, overturning a €1.5 billion EU fine for stifling competition for online advertising, in a dispute over conduct the company said ended in 2016.

The shopping case was one of four 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 be broken up. Vestager is nearing the end of her 10-year tenure at the EU and will soon be replaced by Spain’s Teresa Ribera.

Google will join Apple Inc. and Meta Platforms Inc. in handling formal complaints from the DMA. The bloc first criticized Apple’s app store rules in June and then warned about Meta’s subscription model for ad-free services on Instagram and Facebook. Just this week, Apple was pressured to make changes to its iPhone operating system to comply with the rules.

First publication: Sep 20, 2024 | 11:45 PM IST