The EU continues to crack down on big tech companies with its full arsenal of antitrust rules. This month, Google lost its appeal against a record fine, now slightly trimmed to €4.13 billion, for abusing its dominant position through the tactics it used to keep traffic on Android devices flowing through to the Google search engine. The EU General Court largely upheld the EU Commission’s decision from 2018 that Google had imposed unlawful restrictions on manufacturers of Android mobile devices and mobile network operators in order to cement the dominance of its search engine.
Google's defeat comes as no surprise, as the vast majority of consumers in the EU use Google Search and have the Android operating system installed on their phones. The Court found that Google abused its dominant position by, for example, requiring mobile device manufacturers to pre-install Google Search and the Google Chrome browser in order to use Google’s app store. As a result, users got steered away from competing browsers and search engines, Google's search advertising revenue continued to flow unchallenged, and those revenues funded other anticompetitive and privacy-violating practices.
A High Price For Anti-Competitive Behavior: The EU's Digital Markets Act
The General Court ruling, which Google can still appeal to the EU Court of Justice, reiterates a message that is increasingly being voiced in political circles in Brussels: Anti-competitive behavior must come at a high price. The goal is to bring about a change in behavior among large technology companies that control key services such as search engines, social networks, operating systems, and online intermediary services. The recent adoption of the EU’s Digital Markets Act (DMA) is a prime example of this logic: it tackles anticompetitive practices of the tech sector and proposes sweeping pro-competition regulations with serious penalties for noncompliance. Under the DMA, the so-called “gatekeepers”, the largest platforms that control access to digital markets for other businesses, must comply with a list of do’s and don'ts, all designed to remove barriers companies face in competing with the tech giants.
The DMA reflects the EU Commission’s experience with enforcing antitrust rules in the digital market. Some of the new requirements forbid app stores from conditioning access to the use of the platform’s own payment systems and ban forced single sign-ons. Other rules make it easier for users to freely choose their browser or search engine. The ruling by the General Court in the Google Android case will make it easier for the EU Commission to decide which gatekeepers and services will fall under the new rules and to hold them accountable.
Will Big Tech Change? Better Tools and Investment Needed
Whether the DMA and confident enforcement actions will actually lead to more healthy competition on the internet remains to be seen. The practices targeted in this lawsuit and in the DMA are some of the most important ways that dominant tech firms raise structural barriers to potential competitors, but other barriers exist as well, including access to capital and programming talent. The success of the EU’s efforts will depend on whether enforcers have the tools to change company practices enough, and in a visible enough way, to encourage investment in new competitors.