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Google search, Play Store falling foul of Digital Markets Act rules, says EU

Google search, Play Store falling foul of Digital Markets Act rules, says EU

  • 19.03.2025 09:32
  • techcrunch.com
  • Keywords: Google, Play Store

Google faces EU Digital Markets Act violations for favoring its services in search results and restricting app developer steering, risking fines up to 10% of turnover. The company contests these allegations, arguing compliance efforts and potential negative impacts on users.

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Estimated market influence

Alphabet

Alphabet

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Analyst rating: Buy

Alphabet is suspected of breaching the DMA by self-preferencing its services in Google Search and restricting app developers' steering options in Play Store.

Google

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Analyst rating: N/A

Google's operations, including Search and Play Store, are under investigation for potential DMA violations which could lead to significant financial penalties.

Context

Analysis: Google Search and Play Store Suspected of DMA Violations

Overview

  • Google is under preliminary investigation by the EU for suspected violations of the Digital Markets Act (DMA).
  • The probe focuses on two main issues:
    • Self-preferencing in Google Search results.
    • Restrictions on app developers in the Play Store.

Key Findings

Google Search

  • Violation: Alphabet (Google’s parent) is suspected of favoring its own services (e.g., shopping, hotel booking) over third-party competitors in search results.
  • Evidence:
    • Own services are displayed more prominently at the top of search results.
    • Enhanced visual formats and filtering mechanisms are used to prioritize them.

Play Store

  • Violation: Google is accused of preventing app developers from steering users to alternative distribution channels for better offers.
  • Evidence:
    • Technical restrictions on steering users away from Google’s ecosystem.
    • Charging excessive fees for purchases, including over an unduly long period.

Potential Consequences

Financial Penalties

  • Confirmed violations could lead to fines of up to 10% of global annual turnover, a significant financial risk for Google.

Market Impact

  • The findings could set a precedent for enforcing fair competition in digital markets.
  • Other tech giants like Apple have faced similar scrutiny, with Apple fined €1.84 billion over App Store rules.

Competitive Dynamics

Industry Implications

  • The investigation highlights the EU’s focus on creating a level playing field for competitors of dominant tech platforms.
  • Aggregation and search sites have long complained about Google’s alleged attempts to circumvent DMA rules.

Strategic Considerations

  • Google claims compliance with DMA would harm consumers, businesses, and innovation.
  • Play Store restrictions could expose users to malware and fraud, according to Google.

Future Outlook

Next Steps

  • Google will have the opportunity to respond to the EU’s findings.
  • The final outcome could include:
    • Non-compliance decisions.
    • Regulatory fines.
    • Changes in business practices for both Search and Play Store.

Long-Term Effects

  • The case may influence how other tech companies operate within the EU.
  • Potential shifts in market dynamics as competitors gain more visibility and user choice increases.

Google’s Response

  • Statement: Google argues that compliance with DMA would reduce traffic to European businesses and expose users to risks.
  • Play Store Concerns: Google warns of increased exposure to malicious apps if steering restrictions are enforced.

Conclusion

The EU’s investigation into Google underscores the growing regulatory focus on ensuring fair competition in digital markets. While Google has made some changes post-DMA enforcement, the findings suggest these may not be sufficient. The outcome could have significant implications for both Google and the broader tech industry.