Google to be fined record $5B by European Union over Android

Ruben Fields
July 18, 2018

The European Union will fine Google a record €4.3bn (£3.8bn) for breaking competition laws with its Android smartphone system on Wednesday.

The EU says that Google has imposed these illegal restrictions on Android device makers and mobile network operators since 2011, and it has done so to illegally "cement its dominant position in general Internet search".

Vestager is expected to say that Google shut out rivals by forcing major phone makers including South Korea's Samsung and China's Huawei to pre-install its search engine and Google Chrome browser, thereby freezing out rivals.

"These practices have denied rivals the chance to innovate and compete on the merits", she continued.

Google's officials immediately responded, saying the company willappeal the European Union fine by the Margrethe Vestager's team.

The latest fine is almost double the previous one of 2.4 billion euros, which was also against Google in 2017 in the online shopping comparison case. Its representatives did not respond to requests for comment on Wednesday.

Google has a long history of pushing back and it is likely to drag out its appeal against the fine. "Today's decision and fine are a logical effect, as this is a clear anticompetitive behavior to me".

In order to pre-install Google's apps - including the Play Store and Google Search - on their devices, manufacturers had to commit not to develop or sell even a single device running on an Android fork.

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Citing a "person familiar with the EU decision", Bloomberg said EU Competition Commissioner Margrethe Vestager informed Google CEO Sundar Pichai of the decision in a call yesterday.

After similar complaints by the country's regulator, Google now offers Android users a choice between Google, Yandex and Mail.ru as the default search engine the first time they use the Chrome browser.

"Android means manufacturers don't have to buy or build expensive mobile operating systems".

The Mountain View-based company's high payouts to app developers, coupled with its entrenched relationship with millions of advertisers, has turned Google into the main revenue source for many apps.

Its Play Store accounts for more than 90% of apps downloaded on Android devices in Europe.

In addition, her team has a third investigation underway into Google's advert-placing business AdSense.

The long-awaited decision comes as fears of a transatlantic trade war mount due to President Donald Trump's surprising decision to increase tariffs on European steel and aluminum imports and comes just one week before European Commission head Jean-Claude Juncker is due to travel to the United States for sensitive talks on the tariffs dispute.

This latest fine rests on the dominance of the Android OS, specifically the contracts with OEMs that ensure Google's own apps and services come preinstalled on Android smartphones.

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