EU Fines Google $5 Billion Over Illegal Android Practices

Margrethe Vestager European Commissioner in charge of competition policy.               European Commission

The European Union is hitting Google with a record $5 billion fine for abusing the market dominance of its Android mobile phone operating system.

The EU's decision would bring the running total of Google fines to 6.7 billion after last year's penalty over shopping-search services.

A similar case was brought against the company in Russian Federation, and as a result, Android now offers users in Russian Federation a choice of which default search engine it would like to use.

European Union officials have been investigating Google contracts that require manufacturers of Android phones to take Google's search and browser apps and other Google services when they want to license the Play app store.

The Commission said Google also made payments to some large manufacturers and mobile network operators on the condition that they exclusively pre-installed the Google Search app on their devices.

As you'd expect, Google intends to appeal the ruling and in so doing push back the date at which it needs to stop offering and enforcing these agreements that favor its services. Google said it would appeal the decision. It's the highest anti-competition penalty ever imposed on a company by the EU.

An infographic on the case published by the European Commission               European Commission
An infographic on the case published by the European Commission European Commission

"Android has created more choice for everyone, not less", a tweet from the official Google Europe account said. The Commission found that Google had imposed illegal restrictions on Android device manufacturers and mobile network operators to maintain its dominant position in search.

Competition commissioner Margrethe Vestager issued the fine for three "illegal restrictions" on how Android is used. A vibrant ecosystem, rapid innovations and lower prices are classic hallmarks of robust competition. If its business activities are too harshly constrained, the argument follows, Google might no longer be able to provide Android for free to handset makers. Google parent Alphabet and the commission both declined to comment on the Android fines. These laws are in place to ensure that fair competition is maintained among business corporations for the benefit of consumers. The EC decision concluded that Google has engaged in two instances of illegal tying: the the tying of the Google Search app, which ensured that its Google Search app is pre-installed on practically all Android devices sold in Europe, and the tying of the Google Chrome browser, which also ensured that its mobile browser is pre-installed on almost all Android devices sold in the Europe. "In competitive mobile markets, consumers should be able to make a meaningful choice between search engines and browsers and which apps they can download on their phones and tablets".

And the decision cites Google's efforts to prevent any alternative versions of the Android system from being developed and deployed.

The Commission has accused Google of violating antitrust rules by requiring manufacturers to install its apps on smartphones before they are sold.

Google is appealing that fine, and will appeal the new one too. In 2016, Vestager issued a statement of objections against Google and Android. "This means that we earn revenue only if our apps are installed, and if people choose to use our apps instead of the rival apps", said Pichai.

European Commission President Jean-Claude Juncker will travel to the U.S. to meet Donald Trump to discuss a number of issues, including the economy, counterterrorism, foreign policy and security.

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