Alphabet shares slipped early Thursday after regulators in Brussels unveiled yet another inquiry into Google’s business practices. The stock was down Friday, and the reason isn’t exactly mysterious because Europe is once again questioning whether the world’s most influential search engine is playing fair.
At the center of the latest dispute is the European Union’s Digital Markets Act, a sweeping law designed to curb the power of “gatekeeper” tech platforms.
The European Commission announced a new investigation focused on whether Google is treating publishers equitably when it comes to how their content appears inside Search. For Alphabet investors, it’s yet another reminder that Europe remains the toughest regulatory environment the company faces anywhere on the planet.
Key Points
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Brussels thinks Google may be squeezing publishers with its “site reputation abuse” policy, sparking a new DMA investigation.
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Yes, the DMA allows for massive penalties, but Alphabet almost always avoids big hits by adjusting policies before fines get anywhere near the max.
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Europe now has broad authority over how Google runs Search, meaning more oversight, more rule-changes, and more long-term friction, not a business-breaking threat.
Regulators Are Targeting Google’s “Reputation Abuse” Policy
The Commission’s announcement zeroed in on something arcane but surprisingly important, which is Google’s site reputation abuse policy. Most investors have never heard of it, but publishers certainly have.
The policy penalizes news outlets and other sites when they host articles from third-party commercial partners, often sponsored or syndicated content, and those pages fail to meet Google’s quality expectations.
Google insists the policy is necessary to stop publishers from gaming search rankings with low-value content. But EU officials see a different story. They argue that sponsored material is a normal and increasingly vital revenue stream for publishers fighting to survive in a digital landscape dominated by search and social platforms. In their view, Google may be effectively kneecapping publishers’ ability to monetize their businesses.
It’s worth noting that the DMA gives Europe far more leverage than it ever had during prior Google antitrust cases. Regulators no longer have to prove consumer harm, they simply have to show a gatekeeper’s behavior isn’t “fair or non-discriminatory.” That sets a very low bar for investigations like this one.
And this is no quick matter. Brussels has up to a year to reach a conclusion, which means Alphabet will be operating under a cloud of uncertainty for quite some time.
How Big Could the Penalty Be?
The DMA allows for fines of up to 10% of global revenue, which could double to 20% for repeat offenses.
Alphabet generated $385.5 billion in revenue last year. In theory, that puts the maximum potential penalty at more than $77 billion, a staggering figure that would dwarf every fine the company has faced to date.
But here’s the more realistic picture: Europe almost never imposes the maximum penalty, and companies typically settle by making policy changes long before fines approach anything close to double-digit percentages of global revenue. Even in Alphabet’s prior antitrust cases, where the EU did find clear violations, the fines were a fraction of today’s theoretical ceiling.
In short: the scary number is there to make headlines, not balance sheets.
Should Investors Be Worried?
The odds of Alphabet writing a multibillion-dollar check are extremely low. The much more likely outcome is that Google tweaks its policy to satisfy European regulators, perhaps loosening restrictions on sponsored content or offering publishers clearer guidelines.
Yet another example of Europe treating Alphabet as a systemic utility rather than a private company. Under the DMA, Google must now proactively justify product decisions that would barely raise an eyebrow in the U.S. Even subtle ranking adjustments, internal algorithmic rules, or moderation policies can open the door to formal inquiries.
A lesser-known dynamic is that Europe increasingly sees these cases as a tool for shaping the economics of the media industry. Many EU publishers depend almost entirely on Google Search traffic. That creates a power imbalance Brussels is eager to correct, even if it means stretching the DMA into new territory.
For Alphabet shareholders, the takeaway isn’t panic. It’s awareness. The company’s European operations are becoming more regulated, more political, and more closely scrutinized than ever before. That doesn’t threaten the core business, but it does mean Alphabet will spend more time and resources managing compliance across a continent determined to keep it on a tight leash.