Published: Thu, July 19, 2018
Finance | By Kristine Clayton

Android antitrust: Google hit with giant €4.34 billion fine by Europe

Android antitrust: Google hit with giant  €4.34 billion fine by Europe

Vestager is expected to say that Google shut out rivals by forcing major phone makers including South Korea's Samsung and China's Huawei to pre-install its search engine and Google Chrome browser, thereby freezing out rivals. Those activities included requiring smartphone manufacturers to pre-install Google Search and Chrome on their devices in order to use Google's Play marketplace; paying smartphone makers and mobile network operators to only pre-install Google Search on devices; and preventing manufacturers from selling any devices that were running alternative Android versions that weren't approved by Google. Denying rivals a chance to innovate and compete on the merits. The EC has another antitrust case against Google opened over alleged abuse of the company's AdSense network. "Android has created more choice for everyone, not less", Google said in a statement to Ars.

The EU's competition authorities delayed its Google announcement by one week to avoid a clash with the North Atlantic Treaty Organisation summit, where the US President launched furious attacks at a number of his European allies.

European Union regulators have taken a much more adversarial approach to big tech companies than their United States counterparts, especially when it comes to competition, data protection and tax issues.

The European Commission exceeds last year's then-record 2.4 billion-euro penalty following an investigation into Google's shopping-search service.

An official tweet from the European Commission account said, "We are fining Google €4.34 billion for illegal practices regarding Android mobile devices to strengthen dominance of Google's search engine".

Google must now bring this conduct to an end within 90 days or face penalty payments of up to 5 percent of the average daily worldwide turnover of Alphabet, Google's parent company, the EC said. The ecosystem carries all the properties needed for a fair competition - "rapid innovation and lower prices". In its view, an European Union ruling will harm app developers and customers by undercutting Google's business model of giving away Android software and generating revenue from mobile advertising. Regulators came out with a preliminary ruling in April 2016 in which they said Google had market shares exceeding 90 percent in most European countries in the realm of licensable mobile operating systems. That's because Google's business practices are being called into question and the search giant isn't winning any arguments.

Google argues that its main way of making money from Android is through advertising and the sale of content and apps, unlike Apple, which makes its profits from device sales. Android manufacturers who wanted to pre-install Google's apps couldn't use Amazon's Android fork, for instance, and could only use Google's version of Android.

Consumer advocates welcomed the Commission's decision. Users who find these apps on their phones are likely to stick with them and "do not download competing apps in numbers that can offset the significant commercial advantage derived on pre-installation".

Furthermore, Google's tight control of the Android OS licensing has also prevented the proliferation of Android operating system forks where competitors could have gained a similar foothold.

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