Alphabet (Google) does not comply with European rules and handicaps competitors, the Commission’s reprimand

Brussels – Today (March 19), the European Commission sent to Alphabet two sets of preliminary findings for failing to comply with the Digital Markets Act (DMA) regarding two services for which it was designated as gatekeeper.

First, the Commission informed Alphabet of its preliminary view that some features and functionalities of Google Search treat Alphabet’s services more favourably than those of its competitors, thereby failing to ensure the transparent, fair, and non-discriminatory treatment of third-party services as required by the DMA.

In addition, the Commission informed Alphabet of its preliminary view that its Google Play app marketplace does not comply with the DMA because app developers cannot freely direct consumers to other channels for better deals.

Preliminary results regarding self-preference in Google search

Under the DMA, gatekeepers must not treat their services more favourably in the ranking than similar third-party services. Such ranking must be done in a transparent, fair, and non-discriminatory manner. As stated in its compliance reports, Alphabet has implemented several changes to Google Search. However, as a result of the Commission’s investigation and feedback from interested third parties during several workshops, the Commission preliminarily believes that Alphabet prefers its own services to those of third parties, thereby failing to comply with the DMA. Specifically, Alphabet treats its own services, such as shopping, hotel booking, transportation, or financial and sports results, more favourably in Google’s search results than similar services offered by third parties. More specifically, Alphabet gives its services more prominent treatment than others, displaying them at the top of Google search results or on dedicated spaces, with improved visual formats and filtering mechanisms.

Preliminary findings on Alphabet’s guidance rules for Google Play

Under European rules, app developers who distribute their apps through Google Play should be able, free of charge, to inform customers of cheaper alternative options, direct them to such offers, and allow them to make purchases. The Commission’s preliminary view is that Alphabet is not complying with this obligation. More specifically, based on the evidence currently available to it, the Commission has concerns that Alphabet technically impedes certain aspects of the guidance, for example, by preventing app developers from directing customers to the offers and distribution channels of their choice. Although Alphabet may receive a fee for facilitating an app developer’s initial acquisition of a new customer through Google Play, the fees charged by Alphabet go beyond what is justified. For example, Alphabet charges developers a high commission over an unduly long period for each purchase of digital goods and services.

By sending the preliminary findings, the Commission is informing Alphabet of its preliminary view that the company is in violation of the DMA. This does not prejudge the outcome of the investigation. Alphabet now has the opportunity to exercise its rights of defence by reviewing the documents in the Commission’s investigation file and responding in writing to these preliminary findings. If the Commission’s preliminary views are ultimately confirmed, the Commission will issue a non-compliance decision.

The Commission continues its engagement with Alphabet to identify effective solutions that comply with Articles 6(5) or 5(4) of the DMA.

The DMA aims to ensure contestable and fair markets in the digital sector. It regulates gatekeepers, which are large digital platforms that provide an important entry point between business users and consumers and whose position may give them the power to create a bottleneck in the digital economy. Alphabet was designated as gatekeeper for the Google search service and the Google Play app store for Android by a Commission decision on September 5, 2023.