Alphabet (GOOGL.US) Granted "Final Grace Period" as EU Antitrust Saga Nears Conclusion

The European Commission stated on Friday that it is granting Alphabet (GOOGL.US) subsidiary Google more time to address its concerns, after the tech giant's initial proposals were deemed insufficient by the regulator. "Google is engaging with the Commission both to defend itself and to propose a meaningful solution that genuinely addresses the concerns raised in this case and the preliminary findings," said European Commission spokesperson Thomas Regnier during a daily press briefing. "The current reality is that this solution is simply not robust enough. Therefore, we are giving Google more time to continue engaging with the Commission to propose a solution that truly responds to these concerns and safeguards the substantial interests of European businesses and citizens," he added in an interview.

The European Commission, the EU's competition enforcement body, has accused Google of violating the Digital Markets Act (DMA), legislation designed to curb the power of large technology companies. The Commission is currently in the process of finalizing its decision, which may include imposing a substantial fine on Google. An investigation into Google's potential breaches of the DMA is ongoing, and the regulatory dispute between Google and the EU appears to be approaching its final chapter.

The investigation focuses on areas where the EU believes Google has failed to meet its DMA obligations regarding fair competition and non-discrimination. These include its search results, advertising technology, and anti-spam policies. Regulators had previously issued preliminary conclusions and considered penalties, prompting Google to submit a remedial plan to address the EU's competition concerns. The Commission has judged Google's previously submitted solution as "not robust enough" but is providing additional time for the company to propose a plan that genuinely addresses regulatory concerns. Simultaneously, the Commission is finalizing its decision, the content of which may include a fine for Google.

The dispute primarily revolves around three key lines: First, whether Google Search continues to favor its own vertical services, such as shopping, hotels, and flights, in search results—a self-preferencing issue. Second, whether Google Play restricts developers from steering users to alternative transaction channels, known as anti-steering issues. Third, the scope has recently expanded to include issues like search data sharing and publisher content ranking/anti-spam policies, with the EU particularly seeking fairer data access for competing search engines and AI chatbots.

The EU had issued preliminary DMA non-compliance opinions against Google Search and Google Play in 2025 and continued to push for remedial measures regarding search data sharing in 2026. The DMA allows for maximum fines of up to 10% of a company's global annual turnover, with repeat offenses potentially reaching 20%. However, if Google proposes sufficiently strong structural remedies during this final window, it may still reduce the severity of the fine or avoid some mandatory measures.