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Google Faces Setback as EU Court Adviser Supports Antitrust Regulators

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Alphabet’s Google encountered a potential setback on Thursday after an adviser to Europe’s highest court sided with EU antitrust regulators over a landmark €4.34 billion ($4.98 billion) fine imposed seven years ago.

The European Commission ruled in 2018 that Google had abused its dominant position by using its Android mobile operating system to block competitors. While a lower court upheld the ruling in 2022, it slightly reduced the fine to €4.1 billion. Google subsequently appealed to the Court of Justice of the European Union (CJEU).

Juliane Kokott, Advocate-General at the Luxembourg-based CJEU, issued a non-binding opinion recommending the court reject Google’s appeal and confirm the reduced fine. Kokott stated, “The legal arguments put forward by Google are ineffective.”

She dismissed Google’s claim that regulators should assess the situation by comparing Google with a hypothetical, equally efficient competitor. Kokott explained, “Google held a dominant position in several markets of the Android ecosystem and thus benefited from network effects that enabled it to ensure that users used Google Search.”

Judges typically follow the Advocate-General’s opinion in about 80% of cases. A final ruling is expected in the coming months.

Google responded by emphasizing Android’s role in creating choice and supporting businesses globally, expressing disappointment with the opinion. A spokesperson said, “If followed by the Court, [the opinion] would discourage investment in open platforms and harm Android users, partners, and app developers.”

The regulators’ investigation found Google had imposed illegal practices dating back to 2011, including requiring manufacturers to pre-install Google Search and Chrome browser alongside Google Play on Android devices. Google also paid manufacturers to pre-install only Google Search and prevented the use of rival Android systems.

Google’s Android runs on approximately 73% of the world’s smartphones, according to Statcounter.

This fine is part of a broader enforcement effort against Google, which has amassed €8.25 billion in penalties across three antitrust cases over the past decade, with additional investigations ongoing.

Case Reference: C-738/22 P Google and Alphabet v Commission

EU Probes Corporate Structure of Elon Musk’s X Months After xAI Acquisition

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The European Union announced on Thursday that it is seeking further information from Elon Musk’s social media platform X regarding recent changes to its corporate structure. This inquiry comes months after the platform was acquired by Musk’s xAI in a $33 billion deal.

A spokesperson for the European Commission, the EU’s executive branch, stated, “We are following closely changes in the corporate structure of X, as we would changes in any other designated platform.” However, the spokesperson did not confirm Bloomberg News reports suggesting that regulators are considering potential fines against X under the Digital Services Act (DSA).

Bloomberg reported that the regulator might announce a fine on X before its summer recess in August for alleged violations under the DSA, though such a timeline could be delayed.

Representatives from both xAI and X did not immediately respond to Reuters’ requests for comment.

Under the DSA, companies found in breach can face fines of up to 6% of their global turnover, with repeat offenders potentially banned from operating within Europe.

Earlier this month, X updated its blue checkmark disclaimer to preempt a possible substantial fine from EU antitrust authorities. The European Commission had issued preliminary findings in July last year stating that X violated the DSA’s rules on deceptive design by converting the blue checkmark into a paid verification, thereby misleading users about credibility. X has disputed this assessment.

Microsoft May Walk Away from OpenAI Negotiations Amid Stake Disputes

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Microsoft is reportedly prepared to abandon high-stakes negotiations with OpenAI over the future of their strategic alliance, according to a report by the Financial Times published Wednesday. The talks have hit a stalemate over key disagreements, particularly regarding the size and structure of Microsoft’s future equity stake in the artificial intelligence company.

Sources familiar with the matter told the FT that Microsoft may pause or terminate discussions if no breakthrough is reached. In the meantime, Microsoft plans to lean on its existing commercial agreement, which guarantees access to OpenAI’s technologies, including its ChatGPT models, through 2030.

The situation comes amid increased tension between the two AI powerhouses. A separate Wall Street Journal report earlier this week revealed that OpenAI executives have considered accusing Microsoft of anticompetitive practices related to their ongoing partnership. Both companies are reportedly negotiating changes to Microsoft’s investment terms, including its future stake in OpenAI.

Despite the friction, both sides released a joint statement earlier this week affirming their intention to collaborate:

“Talks are ongoing, and we are optimistic we will continue to build together for years to come.”

Microsoft’s multi-billion dollar investment into OpenAI has positioned it as a central player in the AI boom, helping the company compete aggressively with rivals like Google and Amazon. The partnership has powered Microsoft’s integration of OpenAI models into products like Copilot in Microsoft 365 and Azure OpenAI Service.

Meanwhile, OpenAI is seeking approval from Microsoft—its dominant backer—to convert into a public-benefit corporation, a structural change the startup believes would facilitate greater capital raising flexibility.

The evolving rift highlights the complex interdependence between Big Tech firms and rapidly-scaling AI startups, raising questions about governance, control, and long-term alignment in the sector.