Exclusive-Google faces fines over Google Play if it doesn’t make more concessions, sources say
By Foo Yun Chee
BRUSSELS, Dec 10 (Reuters) – Alphabet’s Google faces a potentially huge EU fine early next year if it does not do more to ensure its app store complies with EU rules aimed at ensuring fair access and competition, people with direct knowledge of the matter said.
The penalty could increase tensions with the United States, which says a series of recently passed EU laws target U.S. tech companies; The criticism was rejected by Europe but included in Washington’s newly published national strategy document.
Google Play has been in the spotlight of the European Commission since March; regulators highlight technical restrictions that prevent app developers from directing users to other channels for cheaper offers.
Another issue is the service fee charged by Google to make it easier for an app developer to acquire a new customer for the first time through Google Play; the regulator said this went beyond what was justified.
Regulations made to Google Play in August to make it easier for app developers to direct customers to other channels and choose a pricing model still fall short, the EU antitrust regulator said, citing Apple’s recent changes to the App Store as a reference.
Apple overhauled its App Store in June after being fined 500 million euros for technical and commercial restrictions that prevented app developers from informing customers about cheaper deals outside the platform.
EU regulators are expected to say Apple’s changes to rules and fees comply with the Digital Markets Act, landmark rules that set out a list of dos and don’ts for Big Tech to ensure rivals can compete and consumers have more choice, other sources told Reuters earlier this year.
Google may propose further changes before regulators impose penalties, likely in the first quarter of next year, the sources said, adding that the timing of any sanctions could vary.
“We continue to work closely with the European Commission on its ongoing investigation, but we have serious concerns that further changes would put Android and Play users at risk of malware, fraud and data theft. Unlike iOS, Android is already open by design,” a Google spokesperson said.
The European Commission, which acts as the EU’s competition watchdog, declined to comment.
DMA penalties can be as much as 10% of a company’s global annual revenue.
The commission also accused Google of favoring related search services over Google Search and is investigating the use of online content for its own purposes. artificial intelligence tools and services and their spam policy.
(Reporting by Foo Yun Chee; Editing by Kirsten Donovan)
