Google says EU digital rules stifle innovation, demands clarity

Alphabet’s Google has warned European regulators that landmark European Union rules designed to curb Big Tech are having unintended consequences for users and businesses, arguing they are stifling innovation and making online services worse for Europeans. According to Reuters, Google is set to deliver a strong message at a workshop hosted by the European Commission in Brussels on Tuesday, urging officials to provide clearer guidance on how to comply with the EU’s Digital Markets Act (DMA). The company is also challenging its critics to present concrete evidence of the costs and benefits of the sweeping new rules.

The Digital Markets Act aims to rein in the power of major technology companies accused of abusing their dominance by favouring their own services. Google is under scrutiny for allegedly prioritising Google Shopping, Google Hotels and Google Flights over rival platforms in search results.

EU regulators have already charged Google under the DMA, which allows for fines of up to 10 per cent of its global annual revenue if found guilty of breaching the rules.

Concerns over travel costs and online experience

In a prepared speech seen by Reuters, Google’s lawyer Clare Kelly plans to argue that the reforms imposed on the company after discussions with the European Commission and industry critics have actually made things worse for European consumers.

“We remain genuinely concerned about real world consequences of the DMA, which are leading to worse online products and experiences for Europeans,” Kelly is expected to say, as per Reuters.

She will claim changes made by Google so far have driven up the cost of travel tickets by making it harder for users to access airline sites directly. European airlines, hotels and restaurants have reportedly suffered up to a 30 per cent drop in direct booking traffic, while customers have complained about cumbersome workarounds and more confusing search results, according to Reuters.

Google asks for clear compliance rules

Google has also proposed further changes to its search results to better highlight rival products, but critics maintain these steps fall short of ensuring a level playing field.

Oliver Bethell, another Google lawyer, will use the workshop to call on regulators to spell out precisely what compliance should look like in practice. “If we can understand precisely what compliance looks like, not just in theory, but taking account of on the ground experience, we can launch compliant services quickly and confidently across the EEA,” Bethell will say, as quoted by Reuters. He will add that critics need to present “real evidence of costs and benefits” that the company and the Commission can properly evaluate.

The day-long European Commission workshop, which begins at 0700 GMT, has been convened specifically to allow Google’s rivals and critics to raise questions and seek clarifications on the company’s compliance plans. The European Commission has repeatedly insisted that the DMA is crucial to opening up digital markets, boosting competition, and protecting consumers. But the pushback from Google underscores the growing tension between Big Tech and European regulators as they grapple with the practical implications of the EU’s toughest ever rules on dominant digital platforms.

(With inputs from the agencies)