Alibaba's reign as the worst offender under the European Union's Digital Markets Act (DMA) lasted just four days, after the European Commission yesterday fined Google €890 million for breaches of the law –€340 million more than the Chinese e-commerce company will pay.
Europe even fined Google twice – once for treating its own services more favorably in search rankings and the second time for failing to properly inform users of its "Play" app store.
The search infractions attracted a fine of €460 million ($523.5m/£393m) and the Play offenses will cost the Chocolate Factory €430 million ($490m/£367.5m).
In US dollars, the fines total $1.013 billion – or one quarter of one percent of the $402 billion in revenue that Google's parent company Alphabet won in its last full financial year. The Big G's net income was $132 billion in the same year, making these fines less than one percent of its profits.
Investors won't be happy that the company has a billion-dollar bill to pay in Europe, but the ten-percent dip in Alphabet's stock price this week may have more to do with news that it burned cash for the first time in 20 years to fund AI investments.
The Commission fined Google after finding it "gives preferential treatment to its own services, including shopping, hotels, transport and sports results, over those of third parties in Google Search."
"Google displays its own services more prominently in search results, including at the top of the search results page or by using enhanced visuals and filters, while similar third-party services do not have the same prominence," the Commission wrote.
The Commission ordered the Play store fine because the DMA requires app store operators to let developers inform buyers about third party app stores or other distribution channels that offer cheaper ways to acquire software. The EU's regulatory authorities felt Google didn't meet that obligation.
We're told Google "... has proposed and started testing changes to how it presents its own services on Google Search," and the Commission will "monitor the implementation of these solutions which constitute substantial progress towards compliance."
Interestingly, the Commission has also started talking to Google about the search fine in the context of the Web giant's new AI Overviews and AI Mode. Those tools show even fewer links that Google search and are already driving more revenue for Google.
Google has also taken steps to ensure that visitors to Play get more info about alternative software-marts. "These constitute good progress towards compliance and will also be assessed in light of the cease and desist order of today's decision," the Commission states.
Google has opposed the decision, arguing it weakens its services and makes Play less secure. The company says it's also developing artificial general intelligence, so probably has enough smarts to figure out how to keep its services safe and relevant.
(Score: 2) by Frosty Piss on Tuesday July 28, @09:03PM (3 children)
It's unlikly either Google or Aliboba will pay anything near these amounts. Say what you will about both (certainly they are guilty) but the sum is an egregious money grab. With these kind of astronomical numbers flying around, lawyer will be involved.
(Score: 2, Offtopic) by corey on Tuesday July 28, @11:39PM (1 child)
> egregious money grab
What do you think would be better?
Taking money from businesses and people has proven in the past to be a good motivator against breaking the law. The DMA lists fines to be laid against companies breaking the law. Google could avoid it if they wanted but they chose to dominate the market.
In my opinion, it’s not enough because Google probably made ten times more in dominating the market doing what they are now being held for. That’s usually the case with these big corporate fines. It’s cheaper to just break the law than pay the little fines that result.
(Score: 2) by Frosty Piss on Wednesday July 29, @01:39AM
Being jealous of companies making money "hand over fist" is often a response, but it's an emotional response not anchored in logic and reason. As for me? I don't give Google or Alibaba or Amazon my money. Others can make the same choices I have. I suggest that in fact, there are not great numbers of people that have been fundementally "hurt".
(Score: 2, Touché) by jb on Wednesday July 29, @05:24AM
Indeed.
Instead of a "great big fine" (that Google won't give a damn about since it's just a drop in the ocean to them), here's a better enforcement option for the EC to consider: hang the CEO; put the entire board of directors in jail for at least 50 years (without possibility of remission); and cover the cost by selling tickets to the hanging.
Only needs to be done once, as after that I'd be very surprised if anyone ever committed the same offence again.
On the other hand a less than 1% fine sends the very clear message "crime does pay".