The European Commission fined Google over $1 billion for violating the European Union’s (EU) Digital Markets Act (DMA) on July 23, marking the tech giant’s first penalty under the 2022 law, according to the European Commission.
Regulators issued two separate decisions: an approximately $530 million fine for giving Google’s own shopping, hotel, transport and sports listings more prominent placement in search results than competing services and around $495 million fine for restricting how app developers on Google Play could direct customers to cheaper offers outside the store.
The company now has until Sept. 21 to comply, 60 days since the fine was issued. If not, it will face periodic penalty payments of up to 5% of its average daily worldwide turnover. Those penalties accrue for each day of continued non-compliance rather than being resolved through a single payment.
Henna Virkkunen, the Commission’s executive vice-president for Tech Sovereignty, Security and Democracy, said in the European Commission’s press release, decisions confirm regulators’ “determination to apply the Digital Markets Act to safeguard business and innovation.”
Google previewed its objections months before the ruling. In May, a spokesperson told Reuters the DMA-driven changes to Search represented “the biggest downgrade in the product’s history, creating a second-rate experience for Europeans to the benefit of a few self-interested complainants.”
Not every economist agrees that bans like this one are the right tool. Research the International Center for Law & Economics argues that empirical studies of digital platforms have found no systematic harm to consumers from a company favoring its own services, pointing to similar debates over Amazon’s competition with third-party sellers and Google’s earlier integration of Photos.
Jiawei Chen, a UC Irvine economics professor and associate editor of the Journal of Industrial Economics, explains that measuring whether Google’s changes moved traffic away from rivals is usually the easy part.
“The much harder question — and the one that defines whether a practice is truly anticompetitive — is the ‘why.’ Is the traffic dropping for a rival because Google is unlawfully foreclosing an equally efficient competitor? Or is the traffic dropping because Google integrated a superior, frictionless feature — like instant flight prices — that users simply prefer,” Chen told New University by email.
The fine’s consequences were not confined to Brussels. Writing on Truth Social, President Donald Trump said the European Union “will pay a very big price” for what he called illegal and unethical conduct. He also said he expected a substantial tariff on European goods to follow.
Christopher Whytock, a UC Irvine Chancellor’s law professor who serves in the U.S. State Department’s Advisory Committee on Private International Law, told New University by email that the EU’s authority to regulate Google this way rests on the same legal basis the United States has long used to apply its own antitrust laws beyond its borders: that the conduct affects markets inside its territory.
He said American and European regulators have historically coordinated around this kind of overlap, but that the current administration shows “a greater tendency to directly resort to the use [of] retaliatory measures such as tariffs.”
That shift was underway well before this fine. Priyaranjan Jha, a UC Irvine economics professor and a fellow at the CESifo international research network, pointed out how a presidential memorandum signed in Feb. 2025 had already directed the administration to consider tariffs against countries whose digital regulations burden American companies, naming the EU’s DMA.
The dispute puts new pressure on the trade framework Trump and European Commission President Ursula von der Leyen reached last July, which capped U.S. tariffs on most European exports at 15% in exchange for the EU dropping tariffs on American industrial goods.
Jha said in an email to New University that the Google fine amounts to a test of “whether the Turnberry framework covered only conventional tariffs or also implicitly constrained European technology regulation.”
Google Search has drawn EU scrutiny for close to a decade. In 2017, the Commission fined the company €2.42 billion for using its dominance to favor its own shopping comparison listings over competitors. Google and its parent company, Alphabet, also recently exhausted their final appeal against a separate $4.5 billion antitrust fine over the Android operating system.
Further, a Pew Research Center study found that when Google’s Artificial Intelligence (AI) Overviews appear above search results, users click through a traditional result only 8% of the time compared with 15% when no AI summary appears.
The shift makes how search results are ranked and displayed more consequential now than when the law was written. The Commission said it is examining whether the same self-preferencing rules should extend to AI Overviews, though it has not reached a finding.
Google’s compliance deadline falls on Sept. 21 as the company weighs whether to appeal a decision that, unlike the fine itself, could take years to resolve.
Aadya Mishra is a News Intern for the summer 2026 quarter. She can be reached at aadyam2@uci.edu.
Edited by Anika Denny and Elizabeth Gregg.
