Google Fined $5 Billion by the EU over Android Antitrust Violations

July 24, 2018 - 4 minutes read

mobile app developerThe European Commission (EC) recently fined Google a record amount: $5 billion. That record beat the last record high also previously set by Google at a price of $2.8 billion. The EU slammed down the fine because it says the San Francisco-based developer abused Android’s market share in three ways:

(1) The company bundles the Google search engine and Chrome app into the operating system (OS), instead of letting consumers make their own choice; (2) Google stops phone manufacturers from releasing phones that use forked versions of the Android OS; and (3) the company “made payments to certain large manufacturers and mobile network operators” in a deal to only include the Google search app on handsets.

A Risky Domination

The EC isn’t out to get Google. But with Google dominating the market share for search engine traffic and advertising revenues, it’s not exactly in a position to argue that it’s only one of many key players. The commission warned that Google must cease all “illegal conduct to an end in an effective manner within 90 days of the decision.” Basically, this means the company needs to stop pre-installing its search engine and Chrome on Android devices and allow manufacturers to ship Android phones that have forked versions of the OS.

Google plans to appeal the case, with a spokesperson saying, “Android has created more choice for everyone, not less. A vibrant ecosystem, rapid innovation, and lower prices are classic hallmarks of robust competition.” Additionally, this decision could disrupt the Android’s free business model, says the company.

Margrethe Vestager, the current European Commissioner for Competition, says, “Today, mobile internet makes up more than half of global internet traffic. It has changed the lives of millions of Europeans. Our case is about three types of restrictions… Google has used Android as a vehicle to cement the dominance of its search engine. These practices have denied rivals the chance to innovate and compete on the merits. They have denied European consumers the benefits of effective competition in the important mobile sphere. This is illegal under EU antitrust rules.”

Leading the Ranks in Fines

Android developers need not worry, however; these updates should only affect manufacturers and the way they bundle apps together on brand new phones. But there might soon be an open market for forked Android versions that developers can contribute to.

This fine is now the highest fine by the EU for anti-trust yet, with Google’s previous fine at second highest. Intel takes the third-highest fine spot with a $1.2 billion fine. Intel’s followed by two Microsoft fines, at fourth- and fifth-highest fines of $1 billion and nearly $660 million. Facebook takes the sixth-highest spot with a ‘measly’ $130 million fine in 2017 for giving regulators misleading information on its 2014 WhatsApp acquisition deal.

Google’s appeal and subsequent court hearings mean that this case is far from being over; it is expected to last years, and the outcome could be a completely different decision than the one the EC laid down this year.

What do you make of the EU’s hefty fine? Do you think it’s justified? Let us know in the comments!

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