OPENTEXT BANNER

EU slaps Google with record fine

Written by NTN staff
19/07/18

Google has been fined EUR4.34 billion by the European Union for the perceived abuse of its market dominance of its Android operating system.

The European Commission has found that Google is using Android mobile devices to strengthen the dominance of its own search engine by imposing illegal restrictions on manufacturers, in contravention of European antitrust rules.

The illegal practices by Google, according to the Commission, included requiring device manufacturers to pre-install the Google Search app and Chrome browser as a condition for licensing Google's app store (the Play Store), which is considered an illegal form of tying services. The company also made payments to certain large manufacturers and mobile operators so that they exclusively installed Google Search on their devices, making it near impossible for alternative search engines to operate profitably. Finally, Google prevented manufacturers wanting to pre-install Google apps from selling any mobile device running on alternative versions of Android not approved by Google (so-called Android forks).

The fine sets a record for antitrust penalties, the highest previously also being levied to the Alphabet company to the tune of EUR2.4 billion for what was seen to be unfair promotion of its own shopping-comparison services in its search results.

Commissioner Margrethe Vestager, who is charge of competition policy in the EU, said: "Google has used Android as a vehicle to cement the dominance of its search engine. These practices have denied rivals the chance to innovate and compete on the merits. They have denied European consumers the benefits of effective competition in the important mobile sphere."

Google has been given 90 days to change its business model or face further penalties
of up to 5 percent of its parent company Alphabet's average daily revenues, although the company is fighting the charge.

Google CEO Sundar Pichai argued that Android brings to the market, both as an alternative to Apple and in the wide range of Android devices available from multiple manufacturers, including several based in the EU.