EU slaps Alphabet with $1 billion fine over Digital Markets Act breaches

The European Union has fined Alphabet €890 million, approximately $1 billion, for breaching the Digital Markets Act (DMA). The penalty addresses two distinct violations: granting preferential treatment to Google’s own Shopping, Hotels, and Flights services in search results, and restricting Android developers from directing users to alternative payment systems. The European Commission announced the decision following a two-year investigation into the company’s compliance with the bloc’s antitrust rules.

The total penalty comprises two separate fines. Google has been fined €460 million for giving its own services an unfair advantage in search results, and €430 million for blocking Android developers from steering consumers to cheaper payment options outside the Play Store. Under the ruling, Google has 60 days to amend its policies to ensure third-party services are treated fairly and to allow developers to promote external offers, or face additional periodic penalty payments.

This enforcement action follows a preliminary ruling in March 2025 and an extension granted in May 2026 after the Commission deemed Google’s previous compliance proposal insufficient. In response to regulatory pressure, Google has implemented changes to its Search services in the EU, such as removing the Google Flights widget and boosting links to third-party comparison websites. However, the company has criticised these adjustments, telling Reuters in May that they represent a significant downgrade that creates a “second-rate experience” for European users.

Regarding the Play Store, Google has repeatedly objected to rules requiring it to open up app distribution, claiming it poses security risks. Despite these objections, the company updated certain terms following consultations with the Commission, which described the changes as “good progress towards compliance.” The fine underscores the EU’s commitment to the DMA, which targets “gatekeeper” companies and allows penalties of up to 10 percent of global annual revenue.

The decision marks a significant escalation in the EU’s regulatory stance against Big Tech. Google was previously fined €2.42 billion in 2017 for similar antitrust breaches regarding its comparison shopping service. The current fine follows a 2018 decision where the Commission imposed a €4.3 billion penalty on Google for abusing its market dominance in the Android ecosystem, a ruling upheld after Google lost its appeal in February 2025.

Teresa Ribera, the Commission’s executive vice-president for clean, just and competitive transition, stated that the best products should succeed because they are better, not because they are owned by the company running the search engine. She emphasised that European consumers have a right to be informed by app developers about the best offers, even when the app store owner does not receive a cut.

Google is also facing legal challenges in the United States, where Epic Games successfully sued the company over in-app purchase fees, forcing it to carry rival Android app stores. Meanwhile, the EU continues to monitor Alphabet’s adherence to the DMA, with the maximum fine for breaches potentially reaching $40 billion based on the company’s reported $400 billion revenue for 2025.