European Commission

Google fined 4.34 billion euro for Android Antitrust Violations

The European Commission has fined Google 4.34 billion euro (£3.9bn / $5bn) following an antitrust investigation into Google’s Android mobile operating system. The probe, led by the European Union’s antitrust czar Margrethe Vestager, looked into accusations that Google has used its dominance in the mobile marketplace to its advantage. The fine eclipses the previous European Commission record penalty of $2.7 billion, also issued to Google.

The firm’s parent Alphabet has been given 90 days to change its business practices or face further penalties of up to 5% of its average global daily turnover. The company says it plans to appeal the decision.

At a press conference in Brussels Competition Commissioner Margrethe Vestager said consumers needed choice and suggested the ruling could lead manufactures to sell smart devices using different versions of the Android operating system to Google’s, such as Amazon’s Fire OS.

Vestager said in a statement.

Today, mobile internet makes up more than half of global internet traffic. It has changed the lives of millions of Europeans. Our case is about three types of restrictions that Google has imposed on Android device manufacturers and network operators to ensure that traffic on Android devices goes to the Google search engine. In this way, 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. This is illegal under EU antitrust rules.

Google’s chief executive Sundar Pichai responded in a blog post,

Today, the European Commission issued a competition decision against Android, and its business model. The decision ignores the fact that Android phones compete with iOS phones, something that 89 percent of respondents to the Commission’s own market survey confirmed. It also misses just how much choice Android provides to thousands of phone makers and mobile network operators who build and sell Android devices; to millions of app developers around the world who have built their businesses with Android; and billions of consumers who can now afford and use cutting-edge Android smartphones.

Rapid innovation, wide choice, and falling prices are classic hallmarks of robust competition and Android has enabled all of them,”

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

The case against Google

The EU first took interest in Google’s alleged abuse of Android back in 2016, when the Commission first informed Google that it may be in violation of antitrust rules with its massively popular mobile operating system. According to the initial charges, Google is accused of requiring phone manufacturers to install the company’s Chrome web browser and its search tool on their devices. Google allegedly offered financial incentives to place its apps on phones, but also threatened to cut off access to the Google Play Store if companies didn’t comply.

Google also allegedly prevented phone makers from creating devices that run on modified or forked versions of Android by requiring the companies to enter into an “Anti-Fragmentation agreement.” Companies were only allowed access to Google’s proprietary apps, including the Google Play Store, if the entered into the arrangement, according to the European Commission.

Ms Vestager alleges that there are three ways that Google has acted illegally:

  • it required Android handset and tablet manufacturers to pre-install the Google Search app and its own web browser Chrome as a condition for allowing them to offer access to its Play app store
  • it made payments to large manufacturers and mobile network operators that agreed to exclusively pre-install the Google Search app on their devices
  • it prevented manufacturers from selling any smart devices powered by alternative “forked” versions of Android by threatening to refuse them permission to pre-install its apps

Ms Vestager acknowledged that Google’s version of Android does not prevent device owners downloading alternative web browsers or using other search engines.

The EU hit Google with a $2.7 billion fine for manipulating search results to favour its own shopping service over third-party options that may have produced better results.

The EU has applied increased pressure to Google in recent months, and its competition commission has reportedly expressed interest in trying to break up the company.

 

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