DMA: Alphabet does not satisfy EU Commission

Google's search engine continues to favor other Google services over third parties in the European Economic Area (EEA). Google's Play Store disrupts competition by charging high fees for app providers and obstructing alternative app stores. The EU Commission has made these accusations against Google owner Alphabet following an investigation under the Digital Markets Act (DMA).

The EU Commission has not yet reached the end of its enforcement of the DMA in the proceedings against Alphabet. On Wednesday, however, it sent its preliminary findings on what it considers to be anti-competitive behavior at Google Search and Google Play to the company. It can respond to this. If the reply is not convincing, Alphabet is threatened with an order to adapt its offers to the legal requirements, at least in the EEA.

In the case of the search engine, the EU Commission, as the supervisory authority for the DMA, found that Alphabet was favoring its services over competitors. These included Google Shopping, hotel bookings and transport services. In particular, the prominent display above other search results is problematic in the view of the EU Commission.

In the case of the Google Play Store for Android, the DMA regulators accuse Alphabet of hindering competition, for example by charging developers excessive fees and unlawfully restricting competition from third-party app stores. This inadmissibly restricts free choice for end users.

Thorny transatlantic political issue

“Our main focus is on achieving a culture of compliance with the Digital Markets Act,” says Internal Market Commissioner Teresa Ribera. Proceedings for non-compliance are only intended if talks with the company in question cannot be successfully concluded. Alphabet has already made adjustments to bring its products classified as gatekeepers into line with the DMA – but the Commission's efforts to date are not enough.

Without saying so, the EU Commission is walking a political tightrope in its steps against Alphabet and Apple. “Both practices affect European and non-European companies that rely on Google Search and Google Play to reach their users in the EU,” said EU Commission Vice-President Henna Virkkunen. The addressee of this message is in Washington: Donald Trump is currently investigating whether EU rules would unlawfully hinder US companies. Just a few days ago, US companies sent a letter to the Trump administration praising the DMA – in contrast to the General Data Protection Regulation and the Digital Services Act – as well as US companies.

For Verena Pausder from the German Startup Association, today's move is a good one: “It is precisely this determined EU that we need. We must defend ourselves against unfair practices by Big Tech.” According to Pausder, “large platforms should not be allowed to use unfair methods to slow down our start-ups and make it difficult for them to access the market.” The German Hotel Association also welcomed the results of the Commission's review: “It is encouraging to see that the EU Commission is sticking to its consistent line for more competition on online portal markets,” said Otto Lindner. The EU consumer protection umbrella organization BEUC did not spare a little sideswipe at the supervisory authority: The decision was one, said Augustin Reyna, “that we expected last year, and Google's behavior may have discouraged consumers from taking advantage of better offers outside its services.”

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