Google Search just got a whole lot worse in the European Union thanks to the ham-fisted regulations coming out of Brussels. The E.U.’s Digital Markets Act is ostensibly designed to promote competition in the tech sector and prevent “gatekeepers” like Google, Meta and Apple from promoting their own services over those from third parties.
Instead, the DMA’s track record mostly consists of keeping innovative technology out of the hands of Europeans. Earlier this year, Apple indefinitely delayed the E.U. rollout of its new Siri, powered by artificial intelligence. Now, Google has just rolled out what it calls the largest reduction in search quality in its 28-year history.
Brussels ratcheted up pressure on Google starting in July: It slapped a 460 million euro fine ($534 million) on the tech giant for favoring its own services in searches related to travel, shopping and sports — and it levied a separate 430 million euro fine ($499 million) for other alleged violations. Regulators gave Google 60 days to comply or else be fined up to 5 percent of its global revenue.
Google finally capitulated, announcing this month that it will remove tools that have long been available on Google Search. Those include features that show real-time pricing of flights and the availability of hotels. E.U. users will now be greeted with just a carousel of links and separate search services.
So, who wins? Not consumers. European users certainly won’t like the deterioration of search, and local businesses won’t benefit, either. Earlier E.U. regulations reduced direct booking traffic to key parts of the European tourism industry by up to 30 percent. With its new changes, Google says users will be directed to intermediary booking websites such as Expedia and Booking.com rather than directly to businesses.
But the broader crackdown on Big Tech stems from E.U. bureaucrats’ hopelessly misguided faith in the “Brussels Effect” — the theory that the European market is so powerful that E.U. regulations will become global standards. That hasn’t happened. Instead of adopting E.U. standards globally, businesses often comply only in the E.U. — or pull out of the market entirely. European customers are then left with stagnant, second-rate technology compared with the rest of the developed world.
And for all the talk about opening markets and leveling the playing field, years of E.U. efforts to kneecap America’s best innovators haven’t spawned any European tech giants able to compete on the basis of merit. Meanwhile, compliance costs handicap smaller companies. Over the past half-century, no European company with a market capitalization of more than 100 billion euros ($116 billion) has been started from the ground up. Eight American tech companies that formed in the same time period hit $1 trillion.
The E.U. shows little sign of backing away from its regulatory superpower status. If anything, the bloc wants to make products even worse. It is imposing tighter regulation on OpenAI under the Digital Services Act. Last month, the E.U. also began enforcing AI restrictions that are already outdated.
Nick Fox, Google’s senior vice president for knowledge and information, lamented that the E.U. regulations force the company to “degrade the user experience.” But it’s the end of his statement that Europeans should get used to hearing: “Users outside the E.U. will not be impacted by these changes.” Now that’s a Brussels effect.
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