Special Report: Can the EC open up the gatekeepers?

The EU’s Digital Markets Act could change the travel search landscape now the Commission has Google in its sights. Ian Taylor reports

The European Commission launched major investigations into Google parent Alphabet and fellow ‘gatekeeper’ platforms Apple and Meta over non-compliance with the Digital Markets Act (DMA) last month.

The EC opened five separate proceedings, the first under the DMA since the Act came into force on March 7.

Google is the subject of two of the investigations, one of them into whether its search results preference the company’s own services, including Google Flights and Google Hotels, over rivals – a practice known as ‘self-preferencing’ and in breach of the DMA.

The six technology giants to which the Act applies have had since last September, when they were formally designated ‘gatekeepers’, to comply with its requirements and were ordered to demonstrate compliance by the March start date.

The Commission noted: “Alphabet’s measures to comply with the DMA may not ensure third-party services featuring on Google’s search results page are treated in a fair and non-discriminatory manner in comparison with Alphabet’s own services.”

Margrethe Vestager, Commission vice-president in charge of competition policy, said: “We suspect the suggested solutions put forward do not fully comply.”

She said the decision to open non-compliance investigations “show DMA compliance is something we take very seriously” and suggested there would be more investigations to come “as we unearth other problems”.

Vestager warned: “We will use all available tools should any gatekeeper try to circumvent or undermine the obligations of the DMA.”

The launch of the investigations came with an order to the companies “to retain certain documents [to] allow us to access relevant evidence in current and future investigations”, with Vestager noting the ‘retention orders’ “extend beyond the investigations we’re opening today”.

Commissioner for the internal market Thierry Breton described the prohibition of self-preferencing as “a pillar of the DMA” noting: “When organising and prioritising information online, gatekeepers should not use their power to unduly promote their own services over rivals.

“This does not seem to be the case when it comes to how results are presented on Google Search. We are concerned that . . . Google Flights and Google Hotels still benefit from preferential treatment.”

He added: “We are digging further and may have to open other non-compliance cases.”

In response, Google pledged “to defend our approach”. Director of competition Oliver Bethell said: “We have made significant changes to the our way our services operate in Europe to comply with the DMA.”

The EC can impose fines under the DMA of up to 10% of a company’s worldwide turnover, or up to 20% in case of repeated infringement. It can also impose “additional remedies”.

Gatekeepers ‘tempted to flout the law’

The Digital Markets Act was designed to rein in the power of the world’s largest tech companies.

Commission vice-president for competition policy Margrethe Vestager explained that work on the DMA began in 2019 in light of “our antitrust enforcement experience” and “the temptation to flout the law” in the tech sector.

The Act was approved by the European Parliament and Council in March 2022. The EC designated six companies – Alphabet, Amazon, Apple, Bytedance (Tik Tok), Meta and Microsoft – as ‘gatekeepers’, covering 22 ‘core platform services’, in September last year.

Gatekeepers are defined by “a strong economic position, significant impact on the internal market and [being] active in multiple EU countries” as well as “a strong intermediation position, [linking] a large user base to a large number of businesses”, and “an entrenched position in the market”.

The companies were obliged to submit DMA compliance reports by March 7.

Google is accused of non-compliance with Article 6 (5) of the DMA which states:

“The gatekeeper shall not treat more favourably, in ranking and related indexing, services and products offered by the gatekeeper itself than similar services or products of a third party. The gatekeeper shall apply transparent, fair and non-discriminatory conditions to such ranking.”

Travel tech firms urged EC to act

The association representing travel technology companies in Brussels, EU Travel Tech, welcomed the investigation into Google over ‘self-preferencing’ in search results.

EU Travel Tech noted the relevant article of the DMA “is designed to ensure gatekeepers do not favour their own services over those of competitors” and that Google’s own intermediation services in travel which offer “comparison of hotels, flights, trains, vacation rentals and more, directly compete with services from companies including EU Travel Tech members”.

The association, whose members include GDSs Amadeus and Travelport and online agencies Expedia, Airbnb, eDreams Odigeo and Skyscanner, sent an open letter to European Commissioners Vestager and Breton on March 7 demanding action against Google.

It argued: “Google continues to favour its own services” and urged the EC “to ensure the DMA is enforced”.

Separately, eDreams Odigeo denounced “Google’s long-standing self-preferencing”, labelling it “a clear violation of the DMA” and called for “strong enforcement”.

Guillaume Teissonniere, eDreams Odigeo general counsel, said: “Google continues the long-standing self-preferencing of its services to the detriment of competing businesses. It is evident Google has chosen a path of non-compliance.”

Share article

View Comments

Jacobs Media is honoured to be the recipient of the 2020 Queen's Award for Enterprise.

The highest official awards for UK businesses since being established by royal warrant in 1965. Read more.