US warns EU’s €890 million fine against Google jeopardises trade deal

The US government has hit back at Brussels after the European Commission slapped on Thursday a €890 million fine against Google for breaching the bloc’s Big Tech rulebook, warning that the sanction puts the EU-US trade deal at risk.

The Commission announced the first fine against Google under the Digital Markets Act (DMA), concluding a two-year investigation into the company’s alleged unfair practices — notably self-preferencing its own services in search results and unfairly treating app developers.

The sanction predictably drew the ire of Washington, which views the EU’s digital rules as unfairly targeting American companies and has repeatedly equated the fines with trade tariffs.

“This is in addition to two recent actions by the Commission under the Digital Markets Act that target Google’s Android operating system and Search services that pose serious risks for the privacy and security of users, represent a de facto forced technology transfer and intellectual property theft, and impose unreasonable financial penalties,” US Trade Representative Jamieson Greer said in a statement after the news.

According to the senior US official, the various fines against Google alone amount to over 2% of the EU’s budget, a contribution larger than that of many of the bloc’s member states.

“The EU often claims that it is looking for stability and predictability in our trading relationship, but these actions are driving massive uncertainty for U.S. exports of goods and services to Europe,” Greer added.

Ongoing dialogue attempts

In recent weeks, the Commission and the US government have launched a so-called digital dialogue, an attempt to revive transatlantic tech cooperation following the decline of the EU-US Trade and Technology Council under the Biden administration.

Critics see the initiative as offering Washington a privileged channel to lobby against EU digital rules, pressing Brussels to soften their application to American businesses under the threat of tariff retaliation.

Last year, Trade Commissioner Maroš Šefčovič emerged as an outspoken voice in favour of postponing an antitrust fine against Google, fearing it could derail the trade negotiations that culminated in the Turnberry agreement.

While the fine was executed, the Commission refrained from making a big announcement and the Commissioner responsible for competition, Teresa Ribera, did not take questions from journalists. The EU Commission cited a scheduling conflict, even though records showed there wasn’t any.

Commission officials, by contrast, now argue the dialogue is meant to defuse tensions and prevent them from erupting into public spats, acknowledging that Washington will always lobby for its own companies, but using the channel as a chance to explain Brussels’ reasoning.

Brussels has also been careful to show its rules don’t target only US tech giants, alternating fines against American companies with sanctions against Chinese ones. On Monday, the Commission slapped AliExpress with a €550 million fine.

The US reaction comes despite these efforts, and the Commission giving US officials an heads-up on the upcoming conclusion of the investigation.

Pressure mounting

On both sides of the pond, pressure has been mounting over enforcement of the EU’s digital rules, threatening to push Brussels and Washington towards confrontation.

In a letter sent earlier this week and seen by EU News, 25 Republican members of the US Congress urged President Donald Trump “to encourage your administration to take decisive action before the EU further entrenches this anti-American regime.”

The lawmakers argue that the EU’s enforcement of the DMA contradicts commitments made to Washington on digital trade barriers, dismiss the ongoing dialogue as a “delay tactic,” and go as far as naming companies that could be targeted in retaliation — Nokia, Axel Springer, Volkswagen, BMW, Ikea and Airbus.

Conversely, a cross-party coalition of MEPs has written to European Commission President Ursula von der Leyen urging faster enforcement of the DMA against Google.

“The EU has been very clear that we have the sovereign right to legislate, including in a digital sector,” a Commission official said. “Today is the proof that when our case is ready, and it’s always based on solid evidence, it’s nondiscriminatory, we adopt a decision.”

Big decision, few implications?

Still, critics point out that the fine is modest for a company of Google’s size — just 0.22% of annual turnover — suggesting the EU executive is going easy on the American giant to avoid drawing Washington’s ire.

“Plenty of people would fare-dodge if the fine were cheaper than the ticket. The size of the fine is disappointing and bears no relation to the damage Google has done to the European economy,” MEP Alexandra Geese (Germany/Greens-EFA) told EU News.

For the Commission, the point of the DMA is not primarily about hefty fines, but about forcing changes in behaviour to make digital markets fairer and more contestable for European consumers and businesses.

Google must comply with the Commission’s decision within 60 days or face periodic penalty payments of up to 5% of its worldwide turnover. The company has already introduced some changes, which the EU executive is currently assessing.

“This implementation of the DMA continues to break everyday products. To comply, we are having to strip away real-time Search features Europeans love – like instant pricing and direct availability for hotels, flights, and restaurants – and dismantle safety protections on Google Play,” Google President of Global Affairs Kent Walker said.

Trade fallout

Commission officials note that elements of the investigation — notably the treatment of app developers — are also under antitrust investigation in the US.

“Just as the US FTC and Justice Department pursue fair competition in digital markets, the DMA ensures those same shared principles are upheld in Europe. This is about market fairness and openness, not discriminatory trade friction and should not be looked at it with this perspective,” MEP Brando Benifei (Italy/S&D) told EU News.

Washington is preparing a fresh round of duties, with the current regime set to expire this week. The Commission has said it will not react to new tariffs as long as they stay within the 15% cap agreed in last year’s EU-US trade deal.

The new tariffs are set to target goods allegedly produced with forced labour that harm US commercial interests. However, a long-floated retaliation targeting the digital tax currently in place in EU countries such as Spain, Italy and France is also rumoured to be in the cards.

“A real dialogue can only take place during a ceasefire. The EU’s recent actions undermine these efforts and pose a real risk to the continuation of transatlantic stability with respect to trade,” Ambassador Greer concluded.