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Commission sends preliminary findings to Alphabet under the Digital Markets Act
The European Commission has issued preliminary findings to Alphabet, citing non-compliance with the Digital Markets Act regarding Google Search and Google Play, impacting third-party services and app developer freedoms. The article Commission sends preliminary findings to Alphabet under the Digital Markets Act first appeared in TravelDailyNews International.
The European Commission sent two sets of preliminary findings to Alphabet for failing to comply with the Digital Markets Act (DMA), regarding two services for which it has been designated as a gatekeeper.
Firstly, the Commission has informed Alphabet of its preliminary view that certain features and functionalities of Google Search treat Alphabet’s own services more favourably compared to rival ones, thus not ensuring the transparent, fair and non-discriminatory treatment of third-party services as required by the DMA. In addition, the Commission has informed Alphabet of its preliminary view that its app marketplace Google Play does not comply with the DMA, as app developers are prevented from freely steering consumers to other channels for better offers.
Preliminary findings regarding self-preferencing in Google search
Under the DMA, gatekeepers must not treat their own services more favourably in ranking than similar services of third parties. Such ranking must be done in a transparent, fair and non-discriminatory way.
As noted in its compliance reports, Alphabet has implemented a series of changes to Google Search.
However, following the Commission’s investigation and feedback from interested third parties during several workshops, the Commission takes the preliminary view that Alphabet self-preferences its own services over those of third parties, thereby failing to comply with the DMA. In particular:
- Alphabettreats its own services, such as shopping, hotel booking, transport, or financial and sports results, more favourably in Google Search results than similar services offered by third parties.
- More specifically, Alphabet gives its own services more prominent treatment compared to others by displaying them at the top of Google Search results or on dedicated spaces, with enhanced visual formats and filtering mechanisms.
Preliminary findings on Alphabet’s steering rules for Google Play
Under the DMA, app developers that distribute their apps via Google Play should be able, free of charge, to inform customers of alternative cheaper possibilities, to steer them to those offers and to allow them to make purchases.
The Commission preliminarily finds that Alphabet fails to comply with that obligation. More specifically, on the basis of the evidence currently at its disposal, the Commission has concerns that:
- Alphabet technically prevents certain aspects of steering, for instance, by preventing app developers from steering customers to the offers and distribution channels of their choice.
- Whilst Alphabet can receive a fee for facilitating the initial acquisition of a new customer by an app developer via Google Play, the fees charged by Alphabet go beyond what is justified. For example, Alphabet charges developers a high fee over an unduly long period of time for every purchase of digital goods and services.
By sending preliminary findings, the Commission informs Alphabet of its preliminary view that the company is in breach of the DMA. This does not prejudge the outcome of the investigation. Alphabet now has the possibility to exercise its rights of defence by examining the documents in the Commission’s investigation file and replying in writing to these preliminary findings. mIf the Commission’s preliminary views are ultimately confirmed, the Commission would adopt a non-compliance decision.
The Commission continues its engagement with Alphabet to identify effective solutions that comply with Articles 6(5) or 5(4) of the DMA.
The EU’s competition rules are hurting consumers and businesses, says Google
“The Commission’s findings require us to make even more changes to how we show certain types of Search results, which would make it harder for people to find what they are looking for and reduce traffic to European businesses.” says Oliver Bethell, Senior Director, Competition, Google. “This is, quite simply, misguided. Let’s take one example: When we can’t show travel results that take people directly to airline sites, they typically end up with a more expensive ticket because airlines have to pay commissions to intermediary websites. Those changes, and many more that we have had to make in Europe, are already causing European businesses to lose up to 30% of traffic. Users are so frustrated that many are resorting to clunky workarounds to get to the companies and information that they want.
The Commission findings on Android and Play create a false choice between openness and security. They risk exposing people in Europe to more malware and fraud and may mean that we can’t provide as much openness in the future:
- Unlike on iOS where Apple must review apps first, developers can freely distribute apps on Android. This creates more choice than any other platform – users can access 50 times more apps on Android than iOS. But if we can’t protect our users from scammy or malicious links that take our users outside of the secure Play environment, then the Commission is effectively forcing us to choose between a closed model and an unsafe one.
- Similarly, if we can’t charge reasonable fees to support the ongoing development of Android and the Play services we offer, then we can’t invest in an open platform that powers billions of phones around the world, helping not just those who can afford to spend 1000 Euros on the latest premium model.
We will keep engaging with the Commission and comply with its rules. But today’s findings now increase the risk of an even worse experience for Europeans. The DMA is designed to regulate large platforms like Google, Apple and Meta, and boost competition, but in reality, it is having the opposite effect by hurting European businesses and consumers. We hope to find a way of addressing these concerns.”
The article Commission sends preliminary findings to Alphabet under the Digital Markets Act first appeared in TravelDailyNews International.
