Following up on the Digital Markets Act, the European Union is launching a “non-compliance investigation” into Alphabet, specifically centered around Google Search and specific rules in the Play Store.
The Digital Markets Act, better known as the DMA, went into effect earlier this year. The new regulation requires Google, Apple, and other “gatekeepers” to comply with new rules that attempt to improve digital competition. As a part of the regulation, the EU can investigate whether or not these companies are compliant, and this week the first investigation have been announced.
Alongside non-compliance investigations into Apple, Meta, and Amazon, the EU is also targeting Google with two areas of focus.
Firstly, there’s going to be an investigation into how Google’s rules in the Play Store affect “steering.” This refers to how apps are allowed to tell users where they can purchase or subscribe. Under the DMA, Google is required to allow developers to “steer” users to offers outside of the platform’s app store without cost, and the EU is “concerned” that both Google and Apple are not being fully compliant with those rules.
Article 5(4) of the DMA requires gatekeepers to allow app developers to “steer” consumers to offers outside the gatekeepers’ app stores, free of charge.
The Commission is concerned that Alphabet’s and Apple’s measures may not be fully compliant as they impose various restrictions and limitations. These constrain, among other things, developers’ ability to freely communicate and promote offers and directly conclude contracts, including by imposing various charges.
Google, earlier this month, announced how the Play Store would handle “external offers” in apps, which did involve fees to developers.
Beyond that, the EU is also taking issue with Google’s “self-preferencing” of its services within Search.
Services specifically mentioned include Google Flights and Shopping, among others, which are more prominently shown in Search versus rival services. It’s required in the DMA that Google treats third-party services “in a fair and non-discriminatory” manner when compared to Google’s own services.
The Commission has opened proceedings against Alphabet, to determine whether Alphabet’s display of Google search results may lead to self-preferencing in relation to Google’s vertical search services (e.g., Google Shopping; Google Flights; Google Hotels) over similar rival services.
The Commission is concerned that Alphabet’s measures implemented to comply with the DMA may not ensure that third-party services featuring on Google’s search results page are treated in a fair and non-discriminatory manner in comparison with Alphabet’s own services, as required by Article 6(5) of the DMA.
These latest investigations will be ongoing for quite some time. The EU’s Commission says that it intends to conclude the investigations “within 12 months,” at which point it will reveal any further changes the “gatekeepers” need to make, as well as potential fines which can be up to 10% of the company’s “worldwide turnover.”
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