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EU Digital Rules Hurting Innovation and European Users

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Google is warning that the European Union’s Digital Markets Act (DMA)—a sweeping antitrust law targeting Big Tech—is stifling innovation and leading to worse experiences for European consumers and businesses. The message will be delivered Tuesday at a European Commission workshop convened to allow Google critics to voice concerns and seek clarity.

Google’s legal team will argue that the new regulatory demands, intended to reduce the dominance of platforms like Google Shopping and Google Flights, are backfiring. According to Clare Kelly, one of Google’s lawyers, the company’s efforts to comply have resulted in clunky interfaces, higher ticket prices, and a 30% drop in direct booking traffic for airlines, hotels, and restaurants across Europe.

“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, according to remarks seen by Reuters.

The Digital Markets Act, which came into force in March 2024, imposes strict obligations on companies designated as “gatekeepers”, like Alphabet’s Google, Apple, Amazon, Meta, Microsoft, and ByteDance. Violations can result in fines up to 10% of global annual revenue.

In response to DMA scrutiny, Google has modified its search display to better highlight rival services, but critics say the changes don’t go far enough to ensure genuine competition. Google’s Oliver Bethell will call on regulators to provide clearer compliance guidelines to avoid delays and uncertainty.

“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.

He also challenges Google’s critics to provide evidence-based analysis of both the costs and benefits of proposed remedies. “We need help identifying the areas where we should focus,” Bethell will argue, urging for data-driven input that can be jointly assessed with the Commission.

The Commission’s workshop—attended by EU officials, competition experts, and Google rivals—aims to clarify compliance expectations and evaluate whether the DMA is achieving its stated goals without unintended negative consequences.

Google Proposes Tweaks to Search Results to Avoid EU Fine Under Digital Markets Act

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Google has offered new concessions to the European Union in an effort to avoid potentially steep antitrust penalties, according to documents reviewed by Reuters. The tech giant’s latest proposal seeks to address concerns that it has been unfairly favoring its own services—like Google Shopping, Google Hotels, and Google Flights—over those of competitors, in violation of the EU’s Digital Markets Act (DMA).

The DMA, which came into force earlier this year, establishes strict requirements for dominant tech companies—or “gatekeepers”—to ensure fair competition and increased consumer choice. The European Commission formally charged Google three months ago, citing anti-competitive practices in vertical search results.

In response, Google has suggested offering a dedicated box at the top of its search results page to showcase a selected third-party vertical search service (VSS), such as platforms specializing in hotel or flight searches. This VSS would be chosen using objective, non-discriminatory criteria and would display three direct links—such as to hotels, airlines, or transport services—formatted identically to Google’s own listings.

Other competing VSS platforms would still be displayed lower in the rankings, but only in expanded view if users click to see more results. Google stated in the documents that while it does not agree with the Commission’s preliminary findings, it is willing to make changes “on a without prejudice basis” to reach a resolution.

The European Commission has called for a feedback meeting with rivals on July 8. Some competing companies told Reuters—on condition of anonymity—that the proposed changes fall short and do not ensure genuine parity with Google’s own offerings.

This is not Google’s first encounter with the EU on similar grounds. In 2017, the company was fined €2.4 billion for giving illegal advantage to its comparison shopping service. The current proceedings under the DMA could result in further significant penalties if the EU deems Google’s remedies insufficient.

German Firms to Submit Separate EU Bids for AI Data Centre, Report Says

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Several major German companies — Deutsche Telekom, Ionos, and the Schwarz Group’s IT subsidiary — plan to submit separate bids to the European Union for funding to build an AI data processing centre, according to Germany’s Tagesspiegel newspaper.

The European Commission has announced plans to allocate $20 billion to support the construction of AI data centres aimed at helping Europe catch up with the U.S. and China in artificial intelligence capabilities.

Under the current German government coalition agreement, Chancellor Friedrich Merz’s conservative party and the Social Democrats have prioritized having at least one of these AI centres located in Germany.

In May, Deutsche Telekom revealed it had partnered with SAP, Ionos, and the Schwarz Group to jointly seek EU funding for an “AI gigafactory” — a specialized facility designed to meet the massive computing demands of AI. However, the Tagesspiegel report noted that SAP is no longer involved in the bid.

SAP did not comment on the bidding process itself but said it is not pursuing a role as operator or investor in AI gigafactories. Instead, SAP aims to contribute as a technology and software provider to future AI data centre projects in Germany and Europe.

Ionos told Reuters that the expression of interest being submitted to Brussels this Friday is an initial step, with a formal application planned later this year alongside partners.

The Schwarz Group declined to confirm whether it will submit a separate bid, stating that if a German consortium is formed, all relevant parties will be invited to contribute to creating the fastest, most reliable, and most convincing AI gigafactory.

Deutsche Telekom did not respond to Reuters requests for comment.