The impending decision from the EU watchdog has come to pass: Google has been fined a record €4.3 billion ($5.1 billion) for abusing the Android operating system’s dominance in the smartphone market, the largest fine imposed on a company in EU history.
Google was previously penalized by the European Commission just last year, when the search giant was slapped with a $2.7 billion fine for lowering the ranking of competitor shopping comparison tools to promote its own.
A third antitrust case against Google is also still open in the EU, which alleges the tech giant holds dominance in online advertising via its Adsense tool.
According to Margrethe Vestager, the European Union’s competition chief, Google used Android's dominant market position to strengthen its lead in search, a practice that has been deemed illegal in the EU.
Fine of €4,34 bn to @Google for 3 types of illegal restrictions on the use of Android. In this way it has cemented the dominance of its search engine. Denying rivals a chance to innovate and compete on the merits. It’s illegal under EU antitrust rules. @Google now has to stop itJuly 18, 2018
More specifically, Google has been accused of:
- forcing Android phone manufacturers to preinstall Chrome and Search as a prerequisite for including the Play Store app
- making payments to larger phone manufacturers and mobile carriers to ensure that Google Search is the exclusive pre-installed search app
- preventing phone manufacturers from installing versions of Android that weren’t already pre-approved by Google, despite Android being an open source software.
The ruling against Google stipulates that the company will need to unbundle its Chrome and Search apps from Android, which may significantly change the free business model the tech giant has been pursuing with the mobile OS.
Sundar Pichai, Google’s CEO, has defended the company’s decision to bundle the apps with the operating system, stating in a blog post (opens in new tab), that Android users were free to remove any pre-installed apps.
“So far, the Android business model has meant that we haven’t had to charge phone makers for our technology, or depend on a tightly controlled distribution model,” he added. “But we are concerned that today’s decision will upset the careful balance that we have struck with Android, and that it sends a troubling signal in favor of proprietary systems over open platforms.”
Google has been given 90 days to cease all illegal practices or face additional fines of up to 5% of Google parent company Alphabet's global turnover.
Google has stated that it plans to appeal the decision.
.@Android has created more choice for everyone, not less. #AndroidWorks pic.twitter.com/FAWpvnpj2GJuly 18, 2018
[Via Bloomberg (opens in new tab)]