Google Faces EU Fines Over Travel Search Dispute

Google is at risk of facing substantial fines from the European Union after failing to reach an agreement with key stakeholders in the travel industry, including Skyscanner and other search services. The dispute revolves around how Google presents travel-related information on its platform, with critics accusing the tech giant of prioritizing its own offerings, such as Google Flights, Hotels, and Shopping, in search results.

At a European workshop held on July 7-8, Google presented its proposals to address these concerns. However, the company's efforts did not satisfy its competitors. Google suggested two alternatives that would place a dedicated section for vertical search services like Skyscanner and Kelkoo at the top of its results pages, with hotels, restaurants, and airlines appearing below. Critics, however, argued that these proposals would not level the playing field and could even mislead users, further entrenching Google's dominance in search rankings.

Skyscanner CEO Bryan Batista expressed concerns that the proposed layouts could mislead users and further entrench Google’s dominance in search rankings. He described the “box” solution as ghettoizing competitors. Other critics pointed out that the new designs for rivals’ boxes lack core functionalities such as real-time price updates, and most airlines are dissatisfied with their listing below third-party booking sites. Lawyer Thomas Hoppner, the complainants’ legal counsel, claimed that Google is deflecting scrutiny from its own regulatory violations by amplifying disputes between hotels and online booking services.

In March, the European Commission issued two preliminary findings to Alphabet, citing non-compliance with the Digital Markets Act. The commission found that certain features and functionalities of Google Search favor Alphabet’s offerings at the expense of its competitors. They also found Google Play to violate the DMA, noting that app developers are restricted from directing users to other channels with better deals. With Google’s proposals on the table, the European Commission is expected to decide on their compliance with the DMA in the next few months. If the changes are found lacking, Google would be obliged to pay its first DMA penalty, which could surpass the Android antitrust fine. Based on last year’s earnings, Google is looking at fines of up to 10% of its global revenue.

In 2018, the EU imposed a €4.34 billion fine, almost $5 billion, on Google for violating antitrust laws. The agency argued that Google had placed illegal restrictions on Android device makers and mobile carriers for years, to reinforce its dominance in general internet search. It added that Google practices hindered competitiveness and stifled innovation, denying European consumers the benefits. Before the penalty, Google required manufacturers to install its search and browser apps as a prerequisite for licensing its Google Play Store. It also paid manufacturers to pre-install the Google Search app exclusively on their devices and blocked its rivals.

Google's parent company, Alphabet, has hired a prominent law firm to defend against potential shareholder lawsuits related to its handling of sexual harassment allegations. This move suggests that the company is preparing for a legal battle on multiple fronts, including antitrust issues and internal corporate governance. The EU's digital laws, which mandate that social media platforms protect users or face fines, add another layer of complexity to Google's situation. The company must navigate not only antitrust regulations but also data protection and user safety requirements. This dual challenge underscores the broader regulatory environment in which tech giants operate, where compliance with multiple sets of laws is essential to avoid penalties.

The potential fines that Google faces could be substantial, given the EU's history of imposing hefty penalties on companies found to be in violation of its regulations. The outcome of this dispute will have implications not only for Google but also for other tech companies operating in the EU, as it sets a precedent for how digital platforms must comply with antitrust and user protection laws. The resolution of these issues will shape the regulatory landscape for tech companies in the EU and beyond.