The European Union is clamping down on tech giants, and Google finds itself in the crosshairs alongside Apple. With increasing scrutiny under the Digital Markets Act (DMA), Google faces accusations from the EU competition watchdog regarding its practices that allegedly hinder fair competition. While Apple is currently confronting its own significant demands, Google is not escaping unscathed in this regulatory upheaval.
According to preliminary findings from the European Commission, Alphabet, Google's parent company, is suspected of violating multiple aspects of the DMA, aimed at curbing the power of large technology firms. These findings have raised two key issues that could lead to serious consequences for Google.
Firstly, the Commission alleges that Alphabet has made it difficult for app developers to point users toward better deals available outside of Google Play, thus imposing excessively high fees. Secondly, there are accusations that Google tends to prioritize its own services—such as Google Shopping and Google Flights—over competing platforms, thereby disadvantaging rivals in search results.
As the investigation unfolds, Alphabet now has an opportunity to refute the Commission's preliminary conclusions. Should these allegations be substantiated, Google may face further regulatory action and potentially hefty fines for non-compliance.
Additionally, this scrutiny comes on the heels of a history of antitrust fines, totaling over €8 billion ($8.7 billion) within the last decade for various infractions. With 2024 revenues projected at around $250 billion, any penalties from the current investigation could be monumental, potentially amounting to 10% of global annual revenue.
As the EU continues to enforce its Digital Markets Act, only time will tell how each tech giant will adapt to these increasing regulatory challenges.
