By Foo Yun Chee
BRUSSELS, Dec 10 (Reuters) – Alphabet’s Google is set to be hit with a potentially large EU fine early next year if it does not do more to ensure that its app store complies with EU rules aimed at ensuring fair access and competition, people with direct knowledge of the matter said.
A fine could ratchet up tensions with the United States, which says a series of recently adopted EU laws target U.S. tech companies, criticism rejected by Europe but which has made it into Washington’s newly published national strategy document.
Google Play has been in the European Commission’s crosshairs since March, with regulators singling out technical restrictions preventing app developers from steering users to other channels for cheaper offers.
Another issue is the service fee charged by Google for facilitating an app developer’s initial acquisition of a new customer via Google Play which the regulator said goes beyond what is justified.
Tweaks to Google Play announced in August to make it easier for app developers to direct customers to other channels and choose a fee model are still falling short, the people said, with the EU antitrust regulator viewing Apple’s recent changes to its App Store as a benchmark.
Apple overhauled its App Store in June after being fined 500 million euros over technical and commercial curbs that prevented app developers from informing customers of cheaper deals outside the platform.
EU regulators are expected to say Apple’s changes in rules and fees comply with the Digital Markets Act, landmark rules which set out a list of dos and don’ts for Big Tech to ensure rivals are able to compete and consumers have more choices, other sources told Reuters earlier this year.
Google can still offer to make more changes before regulators impose a fine, likely in the first quarter of the next year, the people said, adding that the timing of any sanction can still change.
“We continue to work closely with the European Commission in its ongoing investigation but have serious concerns that further changes would put Android and Play users at risk of malware, scams and data theft. Unlike iOS, Android is already open by design,” a Google spokesperson said.
The European Commission, which acts as the EU competition watchdog, declined to comment.
DMA fines can be as much as 10% of a company’s global annual revenue.
The Commission has also charged Google with favouring its associated search services in Google Search, and is investigating its use of online content for its artificial intelligence tools and services and its spam policy.
(Reporting by Foo Yun Chee; Editing by Kirsten Donovan)
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