Google fined record $5bn in Europe over Android platform
18 Jul 2018
European Union regulators have imposed a record $5 billion (4.34 billion euro) penalty on internet search giant Google for forcing its search and web-browsing tools on the makers of Android-equipped smartphones and other devices, potentially resulting in major changes to the world’s most widely deployed mobile operating system.
The penalty, announced by Margrethe Vestager, the European Union’s competition chief, marks the second time in as many years that the region’s antitrust authorities have found that Google threatens corporate rivals and consumers.
The penalty is nearly double the previous record of 2.4 billion euros that the US tech company was ordered to pay last year over its online shopping search service.
It represents just over two weeks of revenue for Google parent Alphabet Inc and would scarcely dent its cash reserves of $102.9 billion. But it could add to a brewing trade war between Brussels and Washington.
The European Commission said Google’s policies pressure smartphone and tablet manufacturers that use Google’s Android operating system to pre-install the tech giant’s own apps. This, according to the EU, leaves little choice for device makers like HTC and Samsung except setting Google search as the default search service and offer Google’s Chrome browser, or lose access to Android’s popular app store.
Without that portal, owners of Android smartphones or tablets can’t easily download games or other apps – or services from Google’s competitors – offered by third-party developers.
Vestager has argued the arrangements ensure Google’s continued dominance of the Internet ecosystem. As a result, her forthcoming ruling could prohibit Google from striking such app-installation deals with device makers, experts have said. Alternatively, the EU could force the company to give consumers an easier way to switch services, like search engines, on their phones or tablets.
Google declined to comment. A Google spokeswoman pointed to comments from general counsel Kent Walker when the EU announced its probe in 2016.
“Android has unleashed a new generation of innovation and inter-platform competition,” he said at the time. “By any measure, it is the most open, flexible, and differentiated of the mobile computing platforms.”
“Nobody is forced to take Google’s apps, but if you want to have certain apps you have to have the whole suite,” said Jakob Kucharczyk, the vice president for competition and EU regulatory policy for the Computer & Communications Industry Association, a trade group that represents Google. That helps Google “make sure they can fund the open source in first place,” he said.
If the EU cracks down on Google for Android, the decision could once again reignite political pressure on US antitrust enforcers, including the Federal Trade Commission, to open their own inquiries. Some members of Congress recently have urged the FTC to take another look at Google.
Google would be able to appeal, even though in the meantime it would need to alter its business practices or risk additional financial penalties for each day it fails to comply.