Google fined a record $5B for breaking European Union antitrust laws

Google fined a record $5B for breaking European Union antitrust laws

Troy Powers
July 19, 2018

Google will be fined $5 billion by the European Commission over competition concerns around its Android mobile operating system, according to a report on Bloomberg.

Google was fined a record €4.3 billion ($5 billion/£3.8 billion) on Wednesday by the EU's competition watchdog for using its dominant position in the marketplace to quash competition.

The commission has concluded that through these contractual restrictions, the tech giant has been able to cement its dominance "in the market for general internet search services, licensable smart mobile operating systems and app stores for the Android mobile operating system".

The EU is also targeting Google's payments to telecoms operators and manufacturers who exclusively install Google search on devices and contracts that prevent handset makers selling phones using other versions of Android. She continued to say Google has been "denying rivals a chance to innovate and compete on the merits". Google Assistant is now one of the company's highest priorities, as AI is seen as the next frontier in tech.

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.

In a statement at the time of the verdict, commissioner Margrethe Vestager said: 'Google has come up with many innovative products and services that have made a difference to our lives. It's the largest fine ever imposed on Google by the EU.

Google will be appealing the decision.

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"Today, mobile internet makes up more than half of global internet traffic", Ms Vestager added. After that, the company can be fined up to 5 percent of its parent company Alphabet's daily revenue for non-compliance. "A vibrant ecosystem, rapid innovation and lower prices are the classic hallmarks of robust competition". Android phone users can easily install other applications, even if they're not pre-installed by manufacturers, he noted.

THE RESPONSE. After the EC announced it had fined Google, the company's CEO, Sundar Pichai, penned a blog post in which he notes that Google plans to appeal the fine.

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

THE BIG PICTURE. This isn't the first fine the European Union has lobbed at Google, but it is by far the biggest. That's because Google's business practices are being called into question and the search giant isn't winning any arguments. The EC ordered Google to give rival comparison shopping services a greater presence in search results, and says it is "actively monitoring Google's compliance with that decision".

Pichai intends to appeal the fines.

"Today's decision rejects the business model that supports Android, which has created more choice for everyone, not less". Regulators have also alleged that Google sought to prevent manufacturers from using alternatives to its Android operating system.