EU Says Google Scroogles App Makers, Also Gives Apple An Antitrust Must-do-list

A year after kicking off its probe into three American tech giants, the European Union has fired off two sets of preliminary findings accusing Google parent Alphabet of failing to comply with Europe's monopoly-busting Digital Markets Act (DMA).

Last March, the European Commission opened formal investigations into Google, Apple, and Meta to assess their compliance with the DMA. Google is the first to take a hit.

In its preliminary findings, the EC – the executive arm of the EU – said Google is giving its own services preferential treatment in search results, and blocking app developers from steering users to cheaper downloads and services outside the Play Store - both in breach of the DMA.

Self-preferencing practices are banned for DMA-designated gatekeepers – Alphabet included – which the EU considers to have significant control over digital markets and the ability to tilt the playing field in their own favor and screw over any competition.

Google promised to make changes to its search results in early 2024, ahead of the DMA's gatekeeper obligations kicking in that March. However, the commission said in its statement on the matter that those tweaks didn't go far enough to meet the bloc's requirements.

Alphabet treats its own services, such as shopping, hotel booking, transport, or financial and sports results, more favorably in Google Search results

"Alphabet treats its own services, such as shopping, hotel booking, transport, or financial and sports results, more favorably in Google Search results than similar services offered by third parties," the EC said.

Regulators also flagged Google for giving its own services more prominent treatment - displaying them in dedicated spaces, at the top of results, and with enhanced visual formats that make them stand out from rivals.

The commission's other preliminary finding against Google focuses on its Play Store rules, which restrict app developers from steering users to cheaper stuff outside Google's platform. That is to say, according to Euro watchdogs, Google unfairly tries to keep people buying software and other things via its services, so it can take a cut of the sale, when it would be possible to purchase all that stuff more cheaply directly from third-party app makers and the like.

"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," said the commission. 

Investigators found Google not only prevents app developers from steering users to alternative offers and channels of their choice, where it does allow steering, it imposes fees for outside payment systems that "go beyond what is justified." 

Google, naturally, disagrees. 

Its senior director for competition Oliver Bethell responded by claiming the EU's findings "will hurt European businesses and consumers, hinder innovation, weaken security, and degrade product quality."

"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," argues Bethell. 

If we can't protect our users from scammy or malicious links … then the commission is effectively forcing us to choose between a closed model and an unsafe one

In defending its steering restrictions, Google argues the commission's findings force a false choice between openness and security.

"Unlike on iOS where Apple must review apps first, developers can freely distribute apps on Android," Bethell said, adding that its openness has led to 50 times more apps available for Android users (cough, cough, cough.)

"If we can't protect our users from scammy or malicious links … then the commission is effectively forcing us to choose between a closed model and an unsafe one," Bethell continued. 

As for its cut of purchases, Google argues it needs to "charge reasonable fees" to fund the development of Android and Play services, claiming this supports an open platform for billions of users - not just those splurging €1,000 on premium phones.

Given the findings are preliminary, Google will have the chance to respond and potentially sway the commission before any final decision is made.

EC issues binding orders to Apple

Separately from the Google, Apple, and Meta non-compliance probes launched last year, the European Commission also yesterday issued legally binding specification decisions detailing how Apple must meet its interoperability obligations under the DMA, following preliminary findings published in December. 

The measures require Apple to open iOS and iPadOS connectivity features to third-party devices, including smartwatches, headphones, and televisions, enabling functions including displaying iOS notifications on non-Apple hardware, speeding up data transfers, and simplifying device pairing.

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"As a result, connected devices of all brands will work better on iPhones," the EC said. 

The decisions also require Apple to improve how developers access technical documentation and specifications needed for interoperability by providing clearer communication, more timely updates, and a predictable timeline for reviewing interoperability requests.

Apple is required to implement the specified measures

"The specification decisions are legally binding," the EC said. "Apple is required to implement the specified measures in accordance with the conditions of the decisions."

While we're still on the naughty step with the Cupertino idiot tax operation, Apple told other media this outcome "wraps [it] in red tape" and forces it to give its new features away for free to companies not bound by the same rules as it is. 

"[This decision is] bad for our products and for our European users," Apple said. "We will continue to work with the European Commission to help them understand our concerns on behalf of our users." 

The commission's decisions on Apple mark the first time it has laid out concrete measures specifying how a gatekeeper must comply with the DMA, said Teresa Ribera, EC EVP for clean, just, and competitive transition. 

"Today moves us closer to ensuring a level playing field in Europe, thanks to the rule of law," Ribera said. ®