European regulators fined Google 890 million euros, roughly $1 billion, on Wednesday for violating the Digital Markets Act, marking the first enforcement action under the law that took effect in 2024. Alphabet shares slipped about 4 percent in premarket trading, though the move owed more to investor anxiety over rising AI spending disclosed in Wednesday's earnings than to the penalty itself.
The Commission found that Google favors its own shopping, hotel and flight services in search results, denying third parties the same prominence. It also ruled that Google blocks app developers on the Play Store from steering users to cheaper offers on external websites, a breach of the DMA's anti-steering provisions.
The order gives Google 60 days to treat rival services in a fair and non-discriminatory manner and to let developers promote and conclude contracts outside the Play Store. Failure to comply could trigger fines of up to 5 percent of Alphabet's worldwide turnover, a figure that would dwarf the current penalty.
Google's president of global affairs, Kent Walker, argued the ruling forces the company to strip real-time pricing and availability features Europeans rely on and to dismantle safety protections on the Play Store. He called it product degradation driven by self-serving complainants, not fair competition.
The Commission acknowledged Google has already proposed and begun testing changes to search presentation, calling it substantial progress toward compliance. Google has also rolled out adjustments to its steering terms. The company said it is reviewing the decision and evaluating an appeal.
The fine is modest relative to Alphabet's cash flow, but the structural remedies are the real story. If the Commission holds the line on search neutrality and app-store openness, the template set here will shape how Apple and Meta are treated under the same gatekeeper rules. The 60-day clock is now the only deadline that matters.