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 EU regulators are preparing to fine Google for failing to curb self-preferencing in search results, escalating tensions with the U.S. and raising the stakes for Big Tech under the Digital Markets Act.

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A New Flashpoint in the Big Tech–EU Power Struggle

Google is once again under the scrutiny of European regulators, and this time the stakes are even higher. According to people familiar with the matter, the tech giant could face a major fine next year for failing to adequately adjust its search engine practices to comply with strict new EU competition rules. The looming penalty marks another escalation in the EU’s campaign to rein in the influence of U.S. tech companies-and a new source of friction between Brussels and Washington.

Years of Scrutiny Over Google’s Market Power

For more than a decade, Google has battled the European Commission over whether its search engine unfairly favors its own services. That debate intensified in March, when EU officials formally accused the company of elevating platforms like Google Shopping, Google Hotels, and Google Flights above rival offerings.

These allegations fall under the Digital Markets Act (DMA), a sweeping law designed to prevent Big Tech “gatekeepers” from using their dominance to tilt the playing field toward their own products. Under the DMA, such behavior is no longer just frowned upon-it’s explicitly illegal.

At the heart of the case is a clash between Google and specialized “vertical search” platforms that operate within specific industries. These include travel sites, hospitality platforms, airline search tools, local restaurant finders, and transportation booking services. Many of these businesses depend heavily on visibility in Google’s results, making even small changes in search ranking highly consequential.

Google’s Fixes Fall Short, Regulators Say

Since receiving its formal charges in March, Google has put forward several revisions to its search-interface design. The latest proposal, submitted in October, attempted to adjust how competing services appear in results pages. But sources involved in the discussions say the revisions still do not satisfy what the DMA requires.

EU officials argue that Google’s adjustments stop short of delivering a truly level playing field. Any fine imposed next year would reflect Brussels’ view that a dominant platform must not only stop prioritizing its own services but do so in a way that meaningfully benefits competitors.

Both the European Commission and Google declined to publicly comment on the ongoing case. However, the regulatory process is expected to continue into 2025, with enforcement actions likely unless Google takes further steps.

Regulators, Intermediaries, and Businesses

The case is complicated by the fact that Google faces conflicting demands from the industries that rely on its search engine. On one side are vertical search engines and intermediaries that say they deserve more visibility when users search for hotels, flights, consumer goods, or local services. On the other are hotels, airlines, restaurants, and small businesses that want direct engagement with customers-rather than being funneled through third-party comparison sites.

In previous statements, a Google spokesperson warned that accommodating certain intermediaries would come at the expense of businesses trying to compete directly. The company has argued that additional modifications to its search design could end up benefitting only a narrow slice of market players while undermining selling opportunities for European merchants themselves.

This tension underscores the challenge regulators face: enforcing fair competition without unintentionally tipping the scales toward one stakeholder group over another.

U.S.–EU Tensions Rise

While EU officials insist the DMA applies equally to all large digital platforms, U.S. policymakers have repeatedly accused Brussels of disproportionately targeting American tech firms. A penalty against Google-one of the most visible U.S. platforms-may once again stir diplomatic unease.

Industry analysts say the case could become a broader test of whether the DMA can withstand legal challenges and political pressure. If the Commission issues a fine in 2025, it would likely signal a more aggressive enforcement posture going forward.

Billions Potentially at Stake

Violations of the DMA can lead to penalties as high as 10 percent of a company’s global annual revenue-a figure that, in Google’s case, could reach into the multi-billion-dollar range. Sources emphasize that the company still has a window to avoid fines by proposing more compliant redesigns of its search engine.

The self-preferencing probe is not Google’s only regulatory threat in Europe. A separate investigation into the practices of Google Play, its dominant Android app store, is also expected to result in enforcement action next year.

Should both cases conclude with fines, Google would find itself facing one of the most consequential regulatory crackdowns in its history.

A Defining Test for the Digital Markets Act

As regulators weigh next steps, Google stands at the center of a rapidly shifting regulatory landscape in Europe. The company’s response in the coming months will not only shape the future of its search and app ecosystem but may also determine how forcefully the EU wields its new competition powers.

The road ahead is uncertain, but one thing is clear: the tension between Big Tech and European regulators is entering a new-and potentially transformative-phase.

Source:  (Reuters)

 

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