Alphabet logo is seen near computer motherboard in this illustration taken, Jan. 8, 2024. Reuters-Yonhap

The European Commission on Wednesday said its preliminary findings suggest that tech giant Alphabet — the parent company of Google — is in breach of EU digital rules.

The investigation found that the company is treating its own services more favourably than those of its rivals, thus failing to ensure the "transparent, fair and non-discriminatory treatment of third-party services" required under the EU's Digital Markets Act (DMA).

"Ensuring that Alphabet fully complies with the DMA is key to ensure business and innovation opportunities for all providers of digital services," said Henna Virkkunen, the EU commissioner for technological sovereignty, security and democracy.

While the commission noted that Alphabet has implemented changes to Google Search, it found that the company continues to give "its own services more prominent treatment" in areas such as shopping, hotel booking, sports results or transport.

The findings also apply to the Google Play store for apps.

The commission's preliminary findings indicate that Alphabet has failed to comply with an obligation to "inform customers of alternative cheaper possibilities, to steer them to those offers and to allow them to make purchases."

The initial assessment is not final and Alphabet maintains the right to reply to the commission's preliminary findings.

Companies operating in the European Union have been subject to the DMA for almost two years since it went into force in May 2023.

The legislation is intended to ensure more competition for digital services, based on the view that large digital platforms known as gatekeepers — such as Apple, Amazon, Microsoft, Alphabet and Meta — have become so powerful that they can unfairly cement their market position.

Those who do not comply with the law can be fined up to 10 percent of their total global turnover. Repeat offenders can be fined 20 percent.

Guidance for Apple

The commission also adopted two decisions on Wednesday issuing Apple guidance on how to comply with DMA rules on interoperability.

The first ensures greater access to iPhone features for third-party connected devices such as smartwatches, headphones or TVs, while the second "improves the transparency and effectiveness of the process" allowing developers to attain interoperability.

Both measures are legally binding and must be implemented by Apple, the commission said.

In a statement, Apple criticized the commission's move, arguing that the decisions gives free access to its feature to companies that do not have to abide by the same rules. (DPA)