EU fines Google €890 million in first Digital Markets Act penalty

The European Commission fined Google €890 million ($1 billion) for breaching the European Union’s Digital Markets Act, its first fine against the company under the bloc’s gatekeeper law.

The penalty, announced July 23, splits into two findings. The Commission attributed €460 million to self-preferencing on Google Search, where the company’s own services appeared more prominently in results than competing offerings. It attributed the other €430 million to anti-steering rules on Google Play that blocked app developers from telling users about cheaper purchase options outside the store.

The fine marks a turn from process to penalty. A week earlier, the Commission had issued Google compliance guidance under the Digital Markets Act; this decision is the first time it has imposed a monetary penalty on the company under the law.

Google must end both practices. If it does not comply, the Commission said, it faces periodic penalties of up to 5% of Alphabet’s average daily worldwide turnover, a mechanism designed to force changes rather than simply collect a one-time sum.

For Brussels, the case sets an enforcement template for how the Digital Markets Act, which designates large platforms as “gatekeepers” subject to conduct rules, will apply to the biggest US tech companies.

Google can challenge the decision in the EU courts, a process that typically runs for years, while the order to change its Search and Play practices takes effect in the meantime.