Google: users and SMEs are the losers of EU competition rules

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After Apple, Google has also renewed its criticism of the EU's Digital Markets Act (DMA). Oliver Bethell, who is responsible for antitrust issues at the search engine giant, is sounding the alarm: according to him, the DMA, which was actually intended to ensure fair competition, is currently causing considerable and unintended damage to European users and small businesses. Google has outlined the corresponding effects in a current statement on the EU Commission's ongoing consultation on the still relatively new competition rules and has included suggestions for improvement.

According to the submission, a clear example of the thesis is the European tourism sector: the DMA forces Google to remove useful travel results in its search that lead directly to hotel and airline websites. Instead, links to intermediaries who charge fees for their listings would have to be displayed. This increases prices for consumers, reduces traffic to the actual providers and makes it more difficult to quickly search for reliable, direct booking information.

Direct traffic from Google Search has already fallen by up to 30 per cent in key areas of the European tourism industry, Bethell explains in a blog post. He refers to a study by the Digital Markets Competition Forum (DMC), according to which European companies in all sectors could face a loss of revenue of up to 114 billion euros due to the economic impact of the DMA. The DMC is academically based. However, its funding by large tech companies such as Meta raises concerns about potential influence.

Innovation stifled?

Beyond search, the Digital Markets Act also makes user protection on Android more difficult, Google criticizes: by forcing the removal of legitimate security measures, the regulations make it easier for fraud and malicious links. The openness of the mobile operating system, which has promoted innovation and choice through "sideloading" and pre-installed app stores in Europe, for example, is jeopardized as a result.

The biggest challenge of the DMA, according to Bethell, remains how the EU can encourage innovation and deliver cutting-edge products while developers have to navigate complex and untested new regulations. Such burdens and uncertainties delay the introduction of products such as Google's latest AI features in member states by up to a year. This is detrimental to European consumers and companies.

Time for a reset

Google has proactively made many changes to fulfil the DMA, the competition expert points out, for example, to instruments for data portability. However, overlapping regulations from national regulatory authorities and court proceedings also undermine the DMA's goal of creating harmonised and consistent EU requirements. The US group is therefore calling on the Commission to make future enforcement measures user-centered, fact-based, consistent, and clear. It is time for a fresh start.

The EU antitrust authority imposed a fine of 2.95 billion euros on Google at the beginning of September. The accusation is based on "abusive practices" in the online advertising market. Google must present a convincing concept to the Commission in order to break up its monopoly.

Apple has already argued that the DMA should be withdrawn or at least massively revised. Together with Meta, the three big tech companies have been urging US President Donald Trump for months to take action against "overzealous" EU regulation in the digital sector. Since then, the Republican has repeatedly threatened the EU.

Backing for the DMA

But there is also support for the Commission. The EU consumer protection umbrella organisation Beuc, for example, accuses Apple in particular of misrepresenting the consequences of the democratically adopted DMA. The regulation is a fundamental tool "to balance market asymmetries and strengthen regulators and civil society".

Although the DMA has only been in force for just over a year, it has already brought "significant changes" for European consumers, praised Beuc. These include greater choice when setting the default browser, the removal of the obligation to use Gmail with a Google account, new payment options and the discontinuation of the use of Apple Pay. The association is appealing to the Commission to continue to enforce the DMA and urge gatekeepers to fully comply with it. The DMA establishes the right of organizations such as consumer protection associations to take legal action.

The European cloud provider association Cispe is even advising the Brussels government institution to expand the DMA and categorize more platforms as gatekeepers with special obligations. The association complains that although cloud services are mentioned in the legal text as central platform services, no hyperscalers from the USA or China have yet been named as gatekeepers. As a result, the DMA has so far been "unable to influence the restoration of fair competition in this fundamental aspect of the digital market".

(vbr)