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

Posted July 19, 2018

- The European Union's antitrust chief has fined Google a record $5 billion for abusing the market dominance of its Android mobile phone operating system. Even for a company as massive as Google, $5 billion isn't exactly pocket change; it represents about 40 percent of Google's net profit in 2017, according to the Wall Street Journal. Google Search and Chrome are as a result pre-installed on the "significant majority" of devices sold in the EU, the European Commission says.

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

Commissioner Margrethe Vestager, in charge of competition policy, said the case focused on three types of restrictions that Google imposed on Android device manufacturers and operators.

It's the biggest antitrust fine ever given by Europe's competition regulator against a single firm, and cements competition commissioner Margrethe Vestager's reputation as Silicon Valley's policewoman.

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Vestager first outlined competition complaints with Android, the most widely adopted mobile operating system in the world, roughly two years ago.

Democratic Sen. Richard Blumenthal of CT tweeted that the fine should "be a wake-up call" to the Federal Trade Commission and "should lead U.S. enforcers to protect consumers".

European Union regulators have taken a much more adversarial approach to big tech companies than their U.S. counterparts, especially when it comes to competition, data protection and tax issues.

Google said that it will appeal the $5 billion fine.

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Vestager said that manufacturers were effectively restricted from creating forks of Android thanks to the fact that Google required such manufacturers to enter into obstructive contracts if they also wanted to make use of proprietary Android apps and services.

The EU also took issue with Google's payments to wireless carriers and phone makers to exclusively pre-install the Google Search app. "In other words, the Commission decision does not question the open source model or the Android operating system as such", it said.

The EU is also now investigating Google in another antitrust case relating to its AdSense service. "A vibrant ecosystem, rapid innovation and lower prices are classic hallmarks of robust competition". "Google has engaged in illegal practices to cement its dominant market position in Internet search". The conditions Google puts as part of the Android license agreement with phone makers is what the regulator considers illegal.

Update: The European Commission has confirmed the fine, while also ordering Google make changes to rectify the problem. That's because Google's business practices are being called into question and the search giant isn't winning any arguments. Plus, it is extremely easy to remove a pre-installed app in the OS and replace it with an alternative from the Play Store.

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