Google Challenges EU Tech Rules Over Innovation Concerns

Alphabet’s Google (NASDAQ:GOOGL) is set to warn EU regulators on Tuesday that the European Union’s Digital Markets Act (DMA) is stifling innovation and negatively affecting European users and businesses. The tech giant plans to argue that new compliance requirements are degrading user experience and increasing costs, particularly in sectors like travel and hospitality.

Google faces scrutiny over allegedly favoring its own services—such as Google Shopping, Google Hotels, and Google Flights—over competitors in search results, a violation that could lead to fines of up to 10% of its global annual revenue. In response, Google has proposed changes to its search algorithms to highlight rival offerings, but critics argue the efforts fall short of creating a fair marketplace.

At a European Commission workshop, Google's lawyer Clare Kelly will argue that these regulatory changes have already led to consumers paying more for airline tickets and have caused direct booking traffic to European airlines, hotels, and restaurants to drop by up to 30%. She will also highlight growing user dissatisfaction due to clunky and inefficient workarounds created to meet compliance.

Google’s legal team, including Oliver Bethell, will urge the EU to provide clear, practical guidance on how to comply with the DMA, stressing the need for real-world examples and feedback. Bethell will call on critics to present hard data showing the actual costs and benefits of the regulations, stating that clear direction would help Google roll out compliant services more confidently across the European Economic Area (EEA), which includes the 27 EU nations plus Iceland, Liechtenstein, and Norway.

Google maintains that it is committed to compliance but warns that poorly defined rules may be harming the very users they aim to protect.