European Union hits Google with $5bn fine for breaking competition rules

19 July, 2018, 00:40 | Author: Darnell Patrick
  • EU hits Google with $5bn fine for breaking competition rules

The European Commission fine will exceed last year's then-record €2.4 billion penalty following an investigation into Google's shopping-search service.

Google has been fined a record-breaking €4.34 billion ($5.04 billion) over antitrust violations regarding its Android operating system.

Google required phone manufacturers to pre-install Google Search and its browser app, Chrome, in order to access Google's app store, Google Play. More significantly, the European Union has also ordered Google to allow phone manufacturers and telecom operators to allow non-Google apps on Android devices. The company said it would appeal the commission's decision.

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 Commission has been investigating Google's use of Android since 2015 after European and American rivals complained.

It is the largest fine imposed by the European Union regulator against a single firm, after a three-year investigation into Google following a complaint by Fairsearch in 2015.

Google, which purchased Android in 2005, has denied any wrongdoing and plans to appeal the EU's ruling.

According to the EC, those measures prevent other companies from having a fair chance to compete with Google's search engine and prevented other variations of the Android operating system to compete. Failing to comply with the decision would make Google liable for a fine of 5 percent of the average daily worldwide turnover of Alphabet, Google's parent company. "A vibrant ecosystem, rapid innovation and lower prices are the classic hallmarks of robust competition".

"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", said Pichai. The organization welcomed the EU's fine today in a press release.

"They have denied European consumers the benefits of effective competition in the important mobile sphere", she added.

Google will probably challenge the fine, just as with did with the previous one.

It also argues that it allows other apps to be pre-installed alongside Google apps, and that agreements not to support altered versions of Android enable it to provide a baseline experience on tens of thousands of different devices. "This harmed competition by significantly reducing their incentives to pre-install competing search apps".

Google will have 90 days change its illegal practices, but it seems unlikely that the tech giant will comply so soon, so don't hold your breath.

Regulators rejected arguments that Apple Inc. competes with Android, saying Apple's phone software can't be licensed by handset makers and that Apple phones are often priced outside many Android users' purchasing power.

Vestager also accused Google of making illegal payments to manufacturers to ensure that its apps are pre-loaded.



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