Google fined $5.04 billion for forcing its apps onto Android phones

Europe has imposed a record-setting €4.3 billion ($5 billion) fine on Google for antitrust violations around its Android smartphone operating system. In 2016, the EU Commission charged Google with forcing mobile network operators to install Chrome, search and other Google apps as the default or exclusive search service on most devices sold in Europe. With a market share of over 80 percent in many countries, that effectively locked others out of the search market, creating a near-monopoly for the search giant.

"The Commission's fine of €4,342,865,000 takes account of the duration and gravity of the infringement," the EU Commission wrote. "In accordance with the Commission's 2006 Guidelines on fines (see press release and MEMO), the fine has been calculated on the basis of the value of Google's revenue from search advertising services on Android devices in the EEA. The Commission decision requires Google to bring its illegal conduct to an end in an effective manner within 90 days of the decision."

The EU Commission said that Google committed antitrust violations in three ways: It required manufacturers to pre-install Google Search and the Chrome browser on Android devices, paid manufacturers and mobile operators on the condition that they exclusively install the Google search app, and prevented manufacturers from selling any mobile devices running Android forks not approved by Google.

The record-setting fine nearly doubles the €2.4 billion ($2.8 billion) penalty levied against Google last year for pushing its own shopping results to the top of search pages. (Google has appealed the amount of that fine.) The much higher figure reflects the fact that search has a much bigger impact than shopping on Google's bottom line. The EU has the right to fine Google up to 10 percent of its annual revenue, which was $110 billion in 2017.

While the fine is a record, it represents just two weeks of Google's yearly revenue. More significantly, the EU has also ordered Google to allow phone manufacturers and telecom operators to allow non-Google apps on Android devices. That would significantly open Android up to more competition, and possibly reduce Google's advertising revenues.

"At a minimum, Google has to stop and to not re-engage in any of the three types of practices," the EU said in a press release. "The decision also requires Google to refrain from any measure that has the same or an equivalent object or effect as these practices."

However, it added that Google could still use its own apps. "The decision does not prevent Google from putting in place a reasonable, fair and objective system to ensure the correct functioning of Android devices using Google proprietary apps and services, without however affecting device manufacturers' freedom to produce devices based on Android forks."

Google will likely appeal this latest fine, too, and has one reason for optimism that it might at least be reduced. Europe's high court recently ruled that a then-record €1.06 billion ($1.4 billion) EU fine against Intel be "re-examined," meaning it could be reduced. On the other hand, the EU isn't quite done with Google yet. It's also expected to fine Google for abusing its position by restricting third-party services from displaying their own ad listings.

Source: EU Commission



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