The European Union (EU) has launched an investigation into Google’s alleged uncompetitive practices, specifically potential violations of the Digital Markets Act (DMA). The DMA is a piece of legislation introduced in 2022 to ensure fair and open online environments for businesses. The EU is investigating whether Google has violated DMA rules by not allowing apps to freely communicate with users and form contracts with them, and by giving preference to its own goods and services in search engine results pages (SERPs).
If Google 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.
The consequences of non-compliance with the DMA include fines, periodic penalty payments, and remedies such as the divestiture of business divisions. The EU Commission is concerned that Google may not be following DMA rules regarding its app stores, as existing measures seem to limit developers’ freedom to advertise and promote offers, and impose charges that make it harder for developers to communicate and make deals directly.
The Commission is also investigating whether Google’s search results give preference to Alphabet’s own services over similar rival services, which could be a violation of the DMA’s demand for fair treatment of third-party services. The investigations into Google, Meta, and Apple are expected to be complete in approximately 12 months.
Tougher data privacy policies resulting from these investigations could potentially reduce Google’s capacity to deliver personalized ads and content, affecting the effectiveness of advertising campaigns. This may make it more difficult for advertisers to reach their desired target audience accurately.
EU antitrust boss Margrethe Vestager stated that the EU will investigate the compliance of Google, Meta, and Apple with the DMA to ensure open and contestable digital markets in Europe. If the investigation concludes that there is a lack of full compliance, heavy fines could be imposed on the gatekeepers.
Google has stated that it has made significant changes to the way its services operate in Europe to comply with the DMA. The company has engaged with the European Commission, stakeholders, and third parties to receive and respond to feedback and balance conflicting needs within the ecosystem.
Meta, on the other hand, mentioned that subscriptions are an alternative to advertising and a well-established business model across many industries. The company will continue to engage constructively with the Commission.
Overall, these investigations into Google, Meta, and Apple highlight the EU’s commitment to creating fair and open digital markets in Europe. The outcome of these investigations could have significant implications for the operations and business models of these tech giants.
