Google Fined a Record $5 Billion by European Antitrust Officials

Isaac Cain
July 18, 2018

On Wednesday afternoon, Europe time, EU Competition Commissioner Margrethe Vestager announced the new fine: €4.34 billion which converts to $5 billion. The statement said Google required handset manufacturers to pre-install the Google Search app and its Chrome browser, limiting rival search engines, and also "made payments to certain large manufacturers and mobile network operators on condition that they exclusively pre-installed the Google Search app on their devices".

The 4.3 billion euro figure would set a new record for an antitrust fine, being the highest penalty since the 2.4 billion euros (~$2.7 billion) the EU Commision fined Google previous year.

The crux of EU's case against Google was that it has shut out other rivals by forcing smartphone manufacturers to pre-install its search engine and Google Chrome browser on Android phones. Based on our investigation thus far, we believe that Google's behaviour denies consumers a wider choice of mobile apps and services, and stands in the way of innovation by other players, in breach of European Union antitrust rules.

Google now has 90 days to change its business practices or it will face a daily fine of up to 5 percent of the average daily worldwide turnover of Alphabet, Google's parent company, the European Union says.

The decision comes just over a year after the Commission slapped a landmark €2.4 billion penalty on Google, a unit of Alphabet Inc, for favouring its shopping service over those of competitors. Google parent Alphabet and the commission both declined to comment on the Android fines.

Google said it will appeal against the levy. Google licenses its Android mobile operating system to third-party manufacturers of mobile devices.

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Margrethe Vestager, the European commissioner for competition, took issue with three specific trade practices, which it found to be illegal. "The decision also requires Google to refrain from any measure that has the same or an equivalent object or effect as these practices".

Vestager also accused Google of making illegal payments to manufacturers to ensure that its apps are pre-loaded. European authorities said those moves unfairly boxed out competitors.

On concerns that Google may subsequently decide to charge for using Android, Vestager said her ruling was not related to the way the company operates.

During the investigation, device manufacturers told the Commission that the Google Play Store is a "must-have" app, which consumers expect to have pre-installed, especially since they can not lawfully install it themselves.

Though $5 billion is a lot of money for anyone, Google would no doubt recover quickly from the fine. This ruling will aim make Android a true open source piece of software and may loosen the company's grip on much of our data.

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