Brussels: Google has been fined €890 million (around $1 billion) by the European Union for breaching the Digital Markets Act (DMA), marking the technology giant’s first major penalty under the landmark competition law. The European Commission said Google violated rules designed to limit the dominance of major technology companies by favouring its own services in search results and restricting app developers on the Google Play Store.
The penalty highlights the European Union’s continued efforts to create a more competitive digital market and prevent large technology companies from using their market power to disadvantage smaller competitors.
Although the fine is significant, EU regulators indicated that Google may avoid additional penalties because of progress made during discussions with the company. The Commission described the ongoing discussions as “constructive dialogue” and said Google had already started testing changes aimed at improving compliance with the DMA.
Google receives two separate penalties
The European Commission divided the €890 million penalty into two separate fines targeting different areas of Google’s business operations.
The first penalty of €460 million was imposed over Google’s search practices. EU regulators accused the company of giving preferential treatment to its own services, including shopping, hotels, transport and sports-related results, while reducing visibility for competing services.
According to the Commission, Google’s search dominance allowed its own products to receive better placement compared to rival businesses, limiting fair competition in online markets.
The second penalty of €430 million relates to the Google Play Store. Regulators said Google restricted app developers from informing users about cheaper offers available outside the Play Store.
Under EU rules, developers must be allowed to direct users towards alternative purchasing options without unnecessary restrictions. The Commission argued that Google’s previous policies prevented developers from competing freely and limited consumer choice.
These are the first penalties issued against Google under the Digital Markets Act. However, they add to the company’s previous competition-related fines in Europe. Over nearly two decades, Google has accumulated total penalties of around €10.38 billion from European regulators.
EU defends action against Big Tech companies
European officials said the decision was necessary to ensure a fair digital environment where smaller companies can compete with global technology giants.
EU antitrust chief Teresa Ribera said companies must respect European laws and that the Digital Markets Act was created to establish a level playing field.
EU technology chief Henna Virkkunen also said the purpose of the regulation was not to target specific companies but to ensure healthy competition within digital markets.
The European Union has previously taken similar action against other major technology firms, including Apple and Meta Platforms, as part of its wider campaign to regulate Big Tech.
Google criticises EU decision
Google criticised the European Commission’s findings and suggested it may challenge the decision legally.
Kent Walker, Google’s President of Global Affairs, said the company was making changes to comply with European regulations but argued that some requirements could reduce the quality of products available to users.
He claimed that complying with the DMA could force Google to remove certain features from Search, including instant pricing information and direct availability details for hotels, flights and restaurants.
Google also argued that changes to Google Play rules could weaken security protections and affect the experience of European consumers.
The company has 60 days to comply with the Commission’s orders, which include treating rival services fairly in search results and allowing developers greater freedom to guide users towards alternative payment options.
Additional penalties unlikely for now
Despite issuing the €1 billion fine, EU regulators suggested that further financial penalties are unlikely in the immediate future due to Google’s recent compliance efforts.
The European Commission said Google had proposed and begun testing changes to how it displays its own services on Google Search, including shopping, hotels and flight-related results.
The regulator also noted improvements in how Google presents shopping advertisements and other specialised content, including sports-related information.
The Commission said it would continue reviewing Google’s proposed changes before deciding whether further action is required.
Google’s modifications to its Google Play policies have also received a preliminary positive response from regulators, who said the changes represented progress towards compliance.
AI services under EU scrutiny
The European Commission also indicated that Google’s artificial intelligence-powered features could come under the scope of the Digital Markets Act.
The regulator said principles from Thursday’s decision could apply to Google’s AI-generated search features, including AI Overviews and AI Mode.
As artificial intelligence becomes increasingly integrated into online search, European authorities are closely monitoring whether AI services could create new advantages for dominant technology companies.
Wider impact on global technology companies
The Google fine comes amid growing tensions between European regulators and US technology companies. The European Union’s actions against Big Tech have faced criticism from the US administration, which has argued that American companies are being unfairly targeted.
The US government has previously threatened possible trade responses over European digital regulations affecting American technology firms.
However, European officials have maintained that the Digital Markets Act is focused on competition, consumer protection and preventing market abuse.
Conclusion: Google faces pressure to change digital practices
The €890 million penalty represents another major step in Europe’s campaign to regulate the world’s largest technology companies. While Google continues to dispute some findings, the company is already making changes to comply with EU requirements.
The outcome of ongoing discussions between Google and European regulators could shape how major online platforms operate in the future, particularly as artificial intelligence and digital services continue to expand.