Europe just fined Google $1 billion, the day before Trump is expected to announce tariffs

The European Commission fined Google the equivalent of about $1 billion Thursday for manipulating its search results to hurt competitors and blocking app developers from directing customers to cheaper deals outside its Play store.

Why it matters: The penalty lands a day before the White House is expected to impose a new round of tariffs and follows a warning to the EU from U.S. Trade Representative Jamieson Greer to stop imposing fees on U.S. tech companies.

Driving the news: The fine is just one half of Thursday's action. The commission also ordered Google to overhaul how it ranks rivals in Search and how it operates its Play store.

• These are the first penalties Google has faced under Europe's Digital Markets Act, and the third against any company, after Apple and Meta last year.

By the numbers: About $524 million of the fine was for Google's search violations and another $490 million for its Play store violations.

• The company has 60 days to comply.

Between the lines: Brussels built an off-ramp into the decision. The European Commission called Google's proposed search changes "substantial progress towards compliance" and its Play changes "good progress."

• The commission also said it would "continue its dialogue" with Google about how the decision affects the tech giant's AI Overviews and AI Mode.

The fine print: Google must now treat third-party services "in a fair and non-discriminatory manner" in its search results.

• It also must allow app developers to "freely communicate, promote offers and conclude contracts with users" outside of the Google Play store.

What they're saying: "The best products should succeed because they're better, not because they're owned by the company running the search engine," Teresa Ribera, the commission's executive vice president for clean, just and competitive transition, said in a statement.

• European tech sovereignty chief Henna Virkkunen added: "Today's decisions send a clear message: we will not hesitate to use our tools."

The other side: Google said the required changes would degrade its products and hurt European businesses and consumers.

• "To comply, we are having to strip away real-time Search features Europeans love — like instant pricing and direct availability for hotels, flights and restaurants — and dismantle safety protections on Google Play," Kent Walker, Google's president of global affairs, said in a statement.

• "This isn't fair competition; it's product degradation driven by a small group of self-serving complainants."

Friction point: White House spokesperson Kush Desai told Axios via email that President Trump has "unequivocally warned trading partners against imposing digital services taxes, fines, and other forms of extortion on America's leading technology sector" and that the administration is committed to addressing these issues with trading partners.

• U.S. Trade Representative Jamieson Greer said in a statement, "This is in addition to two recent actions by the Commission under the Digital Markets Act that target Google's Android operating system and Search services that pose serious risks for the privacy and security of users, represent a de facto forced technology transfer and intellectual property theft, and impose unreasonable financial penalties."

Flashback: The EU hit Google with a $3.5 billion antitrust fine last September for favoring its own ad-tech services — prompting Trump to threaten Europe with new tariffs then, too.

• A U.S. judge separately found that Google illegally monopolized online ad-tech markets.

• Earlier this month, the EU's top court upheld a separate $4.5 billion fine over Google's use of Android to cement its search dominance.

Editor's note: This story has been updated with additional details throughout.

AI is moving fast. Axios AI+ keeps you ahead. Sign up free at Axios.com.