Brussels penalized Google €890 million for favoring its own search results and locking down its app store, then signaled that cooperation has moved far enough to keep daily penalties off the table. The truce may not extend to AI.

BRUSSELS — The European Union fined Google €890 million ($1 billion) on Thursday for breaking its digital competition rules, the first penalty the company has drawn under the bloc's Digital Markets Act. Regulators then signaled it may be the last for a while, pointing to Google's progress toward compliance and indicating that further fines are unlikely.

The decision, first reported by Reuters, splits into two parts. One fine of €460 million covers self-preferencing, the practice of Google giving its own services top billing in search. A second fine of €430 million targets restrictions on Google Play that stopped app developers from telling users, at no cost, about cheaper ways to pay outside the store.

Combined, the penalty is the largest yet handed down under the DMA. It overtakes the €500 million the Commission levied on Apple in April last year, the previous record under the same law.

What the two fines actually cover

The search case turns on prominence. Regulators found that Google placed its own offerings in shopping, hotels, transport and sports at the most visible spots on the results page, dressing them up with enhanced visuals and filters that rival services could not access.

"We found that Google harms businesses offering similar services, such as shopping or sports, by not granting them the same level of prominence on Google Search," said Henna Virkkunen, the EU's digital chief.

The Play Store case is about steering. Under the DMA, an app store cannot bar developers from pointing customers toward better deals elsewhere. Competition Commissioner Teresa Ribera framed the principle in plain terms, saying the best products should win because they are better, not because they belong to the company running the search engine. She added that European consumers have a right to hear from developers about where the best offers are, even when the store owner takes no cut.

Google has 60 days to comply with orders to treat rivals fairly and to let developers steer users freely. If it fails, the Commission can impose periodic penalty payments of up to 5% of average daily worldwide turnover.

Why Brussels is easing off the pedal

For all the size of the number, the tone of the announcement was closer to a nudge than a hammer.

The Commission described a "constructive dialogue" with Google and pointed to substantial progress toward compliance, an indication that daily penalties for non-compliance are now off the table. Google has proposed and begun testing changes to how it presents free services such as shopping, hotels and flights, along with adjustments to shopping ads and sports content. Its revisions to the Play steering terms earned a tentative thumbs up.

That posture reflects the DMA's design. The law's ceiling for a first violation runs to 10% of global annual revenue, a figure that would top $40 billion on Alphabet's books. Brussels chose a fraction of that. The fine is a lever meant to force behavioral change, not a payout meant to punish.

Google pushes back and eyes the courts

Google rejected the findings and left the door open to a legal challenge.

Kent Walker, the company's president of global affairs, argued the ruling degrades the product rather than improving competition. To comply, he said, Google is having to "strip away real-time Search features Europeans love," such as instant pricing and live availability for travel bookings, while dismantling safety protections on Google Play. He called the outcome the work of a small group of self-serving complainants, with European businesses and consumers absorbing the cost.

"This isn't fair competition; it's product degradation," Walker said, adding that regulation should make products better rather than worse.

The company said it is reviewing the decision and weighing an appeal. Any appeal would proceed after the compliance deadline, not before it, so the changes would land in Europe regardless of what happens in court later.

The next battleground is AI

The most consequential line in Thursday's decision looks forward rather than back.

The Commission said Google may have to apply the same principles to its AI-generated answers, the AI Overviews and AI Mode features that increasingly sit at the top of search results, and that talks would continue on that front. That extends the self-preferencing fight into the part of search Google is betting its future on. If AI answers must give rival services the same footing as Google's own, the redesign reaches well beyond the blue links this case was built on.

A widening fight across the Atlantic

The fine landed in the middle of an escalating dispute between Brussels and Washington.

Europe's enforcement drive has angered President Donald Trump's administration, which has threatened tariffs in response to what it casts as targeting of American companies. Earlier this week, 25 Republicans wrote to Trump urging him to act, questioning why the Commission designated firms like Apple and Meta as gatekeepers while Chinese retailers Temu and AliExpress escaped the label, which depends on user numbers in Europe. The lawmakers pressed for the use of Section 301 of the Trade Act of 1974, a statute that lets Washington retaliate against practices it deems unfair, if talks fail to deliver quickly.

Ribera brushed the pressure aside. The duty of the Commission, she said, is to see that its laws are respected and that competition is protected.

This is the third action under the DMA, following the April 2025 penalties against Apple and Meta. It also arrives on top of Google's other European troubles. The company was hit with a €2.95 billion antitrust fine over its advertising technology in September 2025, and in early July the EU's Court of Justice upheld a separate €4.1 billion penalty tied to Android. Across nearly two decades, Google's total EU competition penalties now stand at €10.38 billion.

For Brussels, the message underneath the softer tone is that the machinery keeps running, courts keep backing it, and AI is next in line.