The European Union (EU) said on the 23rd it would impose an €890 million (about 1.5 trillion won) penalty surcharge on U.S. Big Tech Google. It said Google violated the Digital Markets Act (DMA), the EU's key competition law aimed at curbing the market dominance of large online platforms.
The EU concluded that Google leveraged its effectively monopolistic search engine and its app marketplace Google Play to steer users to its own services and applications and discriminate against rivals. Specifically, it imposed a €460 million penalty surcharge for favoring its own services in search results, and a €430 million penalty surcharge for restricting users on Google Play from using cheaper external payment routes.
The DMA prohibits corporations designated as "gatekeepers (dominant market operators)" from giving their own services an advantage over competitors in search results or restricting app developers from directing users to external purchase routes.
The EU found that Google hindered competition by placing its own services at the top of search results or making them more visually prominent in areas such as shopping, transportation, and travel. It also determined that Google violated the obligation to ensure app developers can freely guide users to alternative payment methods.
Google must implement remedial measures within 60 days. If it fails to do so, an additional compliance fine of up to 5% of its worldwide daily revenue may be imposed.
Teresa Ribera, European Commission vice president and competition commissioner, emphasized that the action was taken to protect consumers after conducting the investigation into Google. Ribera said, "The best products should succeed not because they are owned by a company that simply operates a search engine, but because they are genuinely better," adding, "European consumers have the right to be told how to sign up for the best deals offered by app developers."
Google pushed back against the EU's move. According to Reuters, Google said in a statement released that day, "To comply with the EU's rules, we have been forced into a situation where we must remove the real-time search features Europeans love and dismantle safety protections in Google Play," adding, "This is not fair competition, but a degradation in product quality driven by a small number of complainants seeking only their own interests, and the harm will fall squarely on European corporations and consumers."
Jamieson Greer, the U.S. Trade Representative (USTR), also issued a statement criticizing the EU for taking an aggressive approach targeting U.S. technology corporations, saying, "The various penalty surcharges the EU has imposed on Google alone exceed 2% of the EU budget, a contribution greater than many EU member states." He added, "Such actions are creating significant uncertainty for European exports of U.S.-made products and services," undermining the trade stability of the trans-Atlantic alliance.
This is not the first time Google has been hit with a large penalty surcharge from the EU. In 2018, the EU imposed a €4.343 billion (about 7.67 trillion won) penalty surcharge on Google for abusing the market dominance of its Android operating system (OS). Google filed a lawsuit in protest, but the European Court of Justice (ECJ) recently sided with the EU, finalizing the penalty surcharge.
The EU has recently been tightening regulations on U.S. Big Tech and Chinese technology corporations. Both the United States and China are pushing back, and the United States in particular is warning that Big Tech regulation could escalate into a trade conflict with the EU.