Google’s search empire faces $1 billion EU fine over abuse of market power

Google was fined $1 billion by the EU for abusing its search dominance and breaking competition rules under the Digital Markets Act.

The European Union (EU) has fined Google 890 million euros (about $1 billion) for breaking competition rules, according to the European Commission. The decision was announced on Thursday and is expected to increase trade tensions between Europe and the United States.

Google was fined $1 billion by the EU(Photographer: David Paul Morris/Bloomberg) (Bloomberg)

EU regulators said Google used its power as the world's biggest search engine to give its own services an unfair advantage. Regulators said Google placed its own products, such as Google Shopping, travel, games and language translation services, at the top of search results. At the same time, rival services were pushed lower in search rankings, making them less visible to users.

Google Play Store was also part of the case

The European Commission also said Google used unfair rules in its Google Play app store. Regulators said these rules stopped app developers from communicating directly with users or offering payment options outside Google's system, according to The New York Times. This allowed Google to continue collecting app store fees that developers might otherwise avoid.

The EU said Google violated the Digital Markets Act (DMA), a law passed in 2022. The DMA was created to stop the biggest technology companies from using their dominant position to block competition. EU authorities believe large tech firms have become powerful "gatekeepers" in areas like internet search, smartphones, e-commerce and social media, giving them too much control over other businesses.

Teresa Ribera, Executive Vice President of the European Commission overseeing competition policy, defended the decision. She said, "The best products should succeed because they’re better, not because they’re owned by the company running the search engine", The New York Times. She added, "This is the promise of the D.M.A., protecting fairness, choice and innovation in digital markets for the benefit of all European citizens."

Google has 60 days to make changes

Google has been given 60 days to follow the EU's order. The company must make rival online services more visible in search results. If Google fails to comply, it could face additional penalties of up to 5% of its worldwide revenue.

Google strongly disagreed with the decision. Kent Walker, Google's General Counsel, said the ruling would force product changes that would make Google's services worse for European users. He said, "This isn’t fair competition; it’s product degradation", The New York Times. He added, "Regulation should improve products, not make them worse."

Google has been one of the biggest targets of EU regulators for more than a decade. Since 2017, the company has been fined more than €10 billion by the European Union over different competition cases.

Although the fine is large, it is small compared with Google's business size. Just one day before the ruling, Alphabet, Google's parent company, reported a quarterly profit of $112.1 billion, according to The New York Times. The strong earnings were helped by investments in SpaceX and Anthropic.

Decision comes during US-EU trade tensions

The ruling comes at a sensitive time for relations between the United States and the European Union. President Donald Trump has previously accused the EU of unfairly targeting American technology companies. Trump has also warned that the US could take "responsive actions" against regulations affecting American tech firms, according to The New York Times.

The White House is expected to announce a new round of tariffs on the European Union and other trading partners. The timing has raised questions about whether the Google fine could make trade tensions worse.

A European Union official said the fine was announced simply because the investigation was complete. The official said the timing was not influenced by US trade developments and would not surprise the Trump administration.

Trump has criticized Europe's tech rules before

Since returning to the White House, Trump has repeatedly warned against European regulations targeting US technology firms. Last month, he threatened tariffs on countries that impose digital services taxes on American companies, according to The New York Times. In December, the Office of the US Trade Representative said European companies such as Spotify, Siemens and Mistral could face new fees or restrictions.

Google is facing antitrust action in the United States as well. Last year, an American court ordered Google to share some search results and data with rival companies in a landmark monopoly case. That US case has similarities to the European Union's latest ruling.

The European Union remains one of the world's toughest regulators of technology companies. The bloc continues to investigate companies over competition, privacy and online safety, even while trying to support AI and technology growth. Earlier this month, EU regulators also ordered Google to remove restrictions that made it harder for rival AI companies to reach Android smartphone users. This month, the European Union ordered Meta to make major design changes to Instagram and Facebook to make the platforms less addictive, according to The New York Times.

The EU has also taken action against major Chinese technology companies. Last week, AliExpress, owned by Alibaba, was fined about $629 million over the sale of illegal, unsafe and counterfeit products, according to The New York Times. In February, TikTok, owned by ByteDance, was told to make changes to reduce addictive features on its platform. The European Union is also considering a new law that could ban young people from using social media.