Google: EU commission announces record-high fine for abusing the Android monopoly

19 July, 2018, 05:46 | Author: Lora Ball
  • Google оштрафовали в ЕС на 4,3 млрд евро

This week, another fine of $5.1 billion was doled out because Google was found to be abusing its power in the smartphone market.

Citing a "person familiar with the EU decision", Bloomberg said EU Competition Commissioner Margrethe Vestager informed Google CEO Sundar Pichai of the decision in a call yesterday. "Our business model keeps manufacturers' costs low and their flexibility high, while giving consumers unprecedented control of their mobile devices", Kent Walker, a Google senior vice president and general counsel, wrote after the Commission's 2016 statement of objections.

"In this way, Google has used Android as a vehicle to cement the dominance of its search engine", Margrethe Vestager, the European Commissioner for Competition, said in the press release. She said that European Union antitrust laws put a "special responsibility" on dominant businesses, meaning they can not deny other companies the chance "to compete with them on merit".

Android is the most widely used mobile OS in the world, installed on roughly 76% of all smartphones, including those manufactured by Samsung, Sony and Huawei.

The EU's decision to impose the record fine on the US-firm comes at a time of heightened tensions between Brussels and Washington.

The European Commission has fined Google €4.34 billion ($5.057 billion USD) for breaching EU antitrust rules with Android.

Under EU rules, Google could have been fined up to 10 percent of parent company Alphabet Inc's annual revenue, which hit US$110.9 billion past year.

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The executive body says that about 80 percent of smart devices in Europe run on Android. Second, Google has allegedly made payments to both larger manufacturers and network providers in return of them exclusively installing the Google Search app.

Its popularity in turn could mean an uphill battle for European Union antitrust regulators seeking to level the playing field for Google's rivals by ensuring that users can download from competing app stores and that smartphone makers are free to choose pre-installed apps. That would be equivalent to roughly $300 million per day based on 2017's totals, so if the appeal fails, Google will need to pay up or face the possibility of serious damage to its bottom line.

Google has prevented device manufacturers from using any alternative version of Android that was not approved by Google (Android forks).

The commission ordered Google and its parent company, Alphabet, to stop those practices.

For example, all Android phones with the Play Store are required by Google to also include apps like Chrome and Google Search. The conditions Google puts as part of the Android license agreement with phone makers is what the regulator considers illegal. This means that people are far more likely to use search apps and browsers already present on their devices, and are unlikely to download competing apps.

In addition to the fine, Vestager's office wants Google to change its business practices.


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