Just a week after ordering Google to open Android to rival AI assistants under the Digital Markets Act (DMA), the European Commission has now taken a much tougher step by issuing its largest DMA fine against the company.
The EU has fined Google €890 million for breaking the Digital Markets Act, marking the largest penalty issued under the law so far.
In response to this, the Trump administration announced plans to investigate whether the EU unfairly targets American technology companies and warned that new tariffs could follow. What began as a competition enforcement case is now spilling into trade policy, adding fresh tension to the relationship between the U.Sand Brussels.
Why Google Was Fined
The Commission said Google violated two key obligations under the DMA.
The first involved Google Search. Regulators found that Google gave its own services, including shopping, hotels, transport and sports results, more prominent placement than competing services. Under the DMA, companies designated as gatekeepers must rank their own services fairly and cannot give themselves preferential treatment.
The second violation involved Google Play. According to the Commission, Google restricted app developers from directing users to cheaper offers outside the Play Store. Regulators also said the fees Google charged for steering users to alternative payment channels went beyond what the DMA allows.
The Commission fined Google €460 million over its search practices and another €430 million over Google Play. It also ordered the company to bring both practices into compliance.
Alongside the €890 million fine, the Commission gave Google 60 days to bring its Search and Play Store practices into line with the DMA. If it fails to comply, the company could face periodic penalty payments of up to 5% of Alphabet’s average daily worldwide turnover for every additional day it remains out of compliance.
Google Says the Changes will Hurt Users
Google strongly disagreed with the decision and signaled that it plans to appeal.
The company argued that the Commission’s interpretation of the DMA forces it to redesign products in ways that make them less useful for European users.
Google said the required changes would lead to what it described as “product degradation,” arguing that some of the required changes will reduce the quality of its products for users and businesses. The search giant further argues that it will make it harder for people to find relevant information and reduce some security protections for app users.
At the same time, the Commission acknowledged that Google has already been testing changes to its search results and discussing additional compliance measures with regulators. Those efforts, however, were not enough to avoid the fines.
Google has pushed back against the decision, with the company saying it has worked to comply with the DMA and argues that some of the required changes reduce the quality of its products for users and businesses.
The U.S. Responds with a Trade Warning
The regulatory action received an immediate response from the United States.
President Donald Trump said the U.S. would launch a Section 301 investigation into the European Union’s trade practices, and it will examine whether Brussels is unfairly using digital regulations and large financial penalties against American technology companies. Trump also warned that substantial tariffs on European goods could follow if the investigation finds discriminatory treatment.
The Office of the U.S. Trade Representative has also warned that the Google decision could threaten the trade agreement that was reached between the United States and the European Union last year.
Why This Case Matters Beyond Google
The Digital Markets Act was created to limit the market power of the world’s largest digital platforms by setting rules for companies that act as gatekeepers in digital markets. The Google decision is the strongest enforcement action under the law so far and signals that the European Commission is prepared to impose significant financial penalties when companies fail to comply.
The ruling could also strengthen future legal claims against Google. Several European rivals are already preparing damages lawsuits that rely on findings from the Commission’s investigation, which may potentially open another costly chapter for the company.
The Bigger Picture
The dispute is no longer only about how Google ranks search results or operates its app store.
The European Union says it is enforcing competition rules designed to create fairer digital markets. The Trump administration argues that those rules disproportionately affect American technology companies and could justify trade retaliation.
Whether the disagreement ends with negotiations or expands into new tariffs, one thing is already clear – a case that started with digital competition rules is now shaping the wider economic relationship between two of the world’s largest trading partners.
