The EU announced it is investigating Google over potential violations of the Digital Markets Act (DMA).
If the tech giant is found to have violated the DMA, it could face fines of up to 10% of its annual turnover and may be required to divest certain business divisions.
Meta and Apple are also currently under investigation by the EU Commission for alleged breaches of the DMA.
What is the Digital Markets Act (DMA)? The DMA is a piece of legislation introduced in 2022 designed to ensure that large online platforms, called “gatekeepers”, behave in a fair way online to create a fair and open environment for online businesses. Only six gatekeepers have obligations under the DMA:
All six companies, none of which are based in the EU, were required to ensure they fully complied with DMA obligations and submit compliance reports by March 7.
DMA violation penalties. The consequences of non-compliance with the DMA includes:
Under investigation. EU antitrust boss Margrethe Vestager and industry head Thierry Breton confirmed that investigations Google is being investigated for”
App store concerns. The Commission is investigating whether Google has broken the DMA rules regarding its app stores. According to Article 5(4) of the DMA, gatekeepers (the six companies the DMA applies to) must let app developers guide users to offers outside their app stores without any fees. The Commission is concerned that Google might not be following this rule entirely as its existing measures seem to limit developers’ freedom to advertise and promote offers. They also impose charges, which reportedly make it harder for developers to communicate and make deals directly.
Self-preferencing concerns. The Commission is also investigating Alphabet to see if Google’s search results give preference to Alphabet’s own services like Google Shopping, Google Flights, and Google Hotels over similar rival services. They’re worried that Alphabet’s actions to comply with the DMA might not ensure fair treatment for third-party services listed on Google’s search results page compared to Alphabet’s own services, as demanded by Article 6(5) of the DMA.
Why we care. Tougher data privacy policies might affect Google’s capacity to deliver personalized ads and content. This could potentially reduce the effectiveness of advertising campaigns, as they may not effectively reach the desired target audience as accurately.
Additional concerns. The EU Commission is also conducting three additional investigations into Meta and Apple for:
All five investigations are expected to be complete in approximately 12 months.
What the EU is saying. EU antitrust boss Margrethe Vestager said in a statement:
Industry head Thierry Breton added:
What Google is saying. Oliver Bethell, a competition executive at Google, said in a statement:
What Meta is saying. Meta said in a statement:
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Business email address Subscribe Processing...Deep dive. Read the European Commission’s announcement in full for more information.