EU Fines Google $1 Billion for DMA Search and App Store Violations

European regulators imposed an €890 million penalty on Alphabet, Google’s parent company, for two breaches of the Digital Markets Act that limit consumer choice and favor the company’s own services. The fines target Google Search results that elevate Alphabet properties such as Shopping, Hotels, and Flights while demoting rivals, and Play Store rules that block developers from directing users to cheaper external payment options.

The European Commission split the total into separate penalties of €460 million for self-preferencing in search and €430 million for steering restrictions. Google must revise its ranking practices to treat third-party services fairly and allow app developers to promote alternative offers both inside and outside the Play Store. The company has 60 days to implement the changes or face additional daily penalties of up to 5 percent of global turnover.

Google described the required adjustments as product degradation that removes features users value and weakens safety protections. President of Global Affairs Kent Walker said the rules force the removal of real-time pricing and availability tools for hotels, flights, and restaurants while exposing users to greater risk from external links. The Commission countered that the best products should win on merit, not ownership of the platform, and that developers must be free to inform users of lower-cost alternatives.

The decision follows a non-compliance investigation opened more than two years earlier, a March 2025 preliminary finding, and a May 2026 extension after the Commission rejected an earlier Google proposal as insufficient. Google had already tested changes such as removing the Flights widget for EU users and adjusting search layouts to highlight third-party comparison sites. The Commission acknowledged some progress on Play Store terms but concluded that core obligations remained unmet.

Alphabet shares fell about 4 percent in premarket trading after the announcement, though analysts attributed most of the move to separate concerns over rising AI spending disclosed in the company’s earnings report. The fine is the first under the DMA but sits alongside earlier EU antitrust actions, including a 2017 shopping comparison case and a 2018 Android operating-system penalty that Google recently lost on appeal.

The DMA designates large platforms as gatekeepers and requires them to avoid self-preferencing and allow user choice. Maximum penalties can reach 10 percent of global annual revenue. Google faces parallel scrutiny in the United States, where a court has already ordered changes to its app-store policies following litigation brought by Epic Games.