European Union fines Google $5 billion over Android antitrust case

Jermaine Castillo
July 19, 2018

The EU's decision would bring the running total of Google fines to 6.7 billion after last year's penalty over shopping-search services.

More significant than a blockbuster fine could be an accompanying order freeing up mobile phone manufacturers to choose non-Google apps to install on Android smartphones.

In addition, Google gave "financial incentives" to manufacturers and mobile network operators if they pre-installed Google Search on their devices, the commission said.

EU Competition Commissioner Margrethe Vestager said Wednesday that Google went against EU rules when it required mobile phone producers to pre-install the Google Search and browser apps as a condition for licensing Google's app store. Denying rivals a chance to innovate and compete on the merits. Even for a company as massive as Google, $5 billion isn't exactly pocket change; it represents about 40 percent of Google's net profit in 2017, according to the Wall Street Journal. Many Android smartphone makers already offer their own web browsers as the default browser, but they also include Google's Chrome as an option, often hidden within a smartphone's app library.

Pichai asserts that the EC failed to consider that Android does have at least one major competitor in the mobile market: Apple's iOS.

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Google said that it would appeal the decision.

If the ruling stands, consumers within the European Union could soon find many more Android smartphones being offered with non-Google web browsers and search engines set as the default.

European Union rules say Google could be fined up to 10 percent of parent company Alphabet's annual revenue, which hit $110.9 billion in 2017. The ecosystem carries all the properties needed for a fair competition - "rapid innovation and lower prices". The regulators are also aiming to control how Google conducts its business.

Google has been issued with a record fine of more than four billion euro by the European Commission competition authorities for abusing its market position through the Android mobile operating system.

"They have denied European consumers the benefits of effective competition in the important mobile sphere", she added.

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Though $5 billion is a lot of money for anyone, Google would no doubt recover quickly from the fine.

Google will have 90 days change its illegal practices, but it seems unlikely that the tech giant will comply so soon, so don't hold your breath. This week, another fine of $5.1 billion was doled out because Google was found to be abusing its power in the smartphone market.

"The complaint dragged on for five years because Google used every trick in its book to delay action", said Thomas Vinje, counsel to FairSearch.

"Today's decision rejects the business model that supports Android, which has created more choice for everyone, not less".

European Commission President Jean-Claude Juncker will travel to the U.S. to meet Donald Trump to discuss a number of issues, including the economy, counterterrorism, foreign policy and security.

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