Google hit with record £4 billion fine for abusing power in Android phones
The European Commission has fined the firm for forcing manufacturers to install search and browser apps.
Google has been issued with a record fine of more than four billion euro by the European Commission competition authorities for abusing its market position through the Android mobile operating system.
The Commission said it was issuing a fine of 4.34 billion euro (£3.9 billion) over restrictions placed on mobile phone manufacturers using Android to drive internet traffic to Google’s own search engine.
European Commissioner Margrethe Vestager said the technology giant was “denying rivals a chance to innovate and compete”, which was “illegal under EU antitrust rules”.
Fine of €4,34 bn to @Google for 3 types of illegal restrictions on the use of Android. In this way it has cemented the dominance of its search engine. Denying rivals a chance to innovate and compete on the merits. It’s illegal under EU antitrust rules. @Google now has to stop it— Margrethe Vestager (@vestager) July 18, 2018
“Google has required manufacturers to pre-install the Google search and browser apps on devices running on the Android mobile operating system,” she said, adding that this was a condition for operators being given access to the Google Play app store.
The Commission said Google also made payments to some large manufacturers and mobile network operators on the condition that they exclusively pre-installed the Google Search app on their devices.
“Today, mobile internet makes up more than half of global internet traffic,” Ms Vestager added.
“It has changed the lives of millions of Europeans. Our case is about three types of restrictions that Google has imposed on Android device manufacturers and network operators to ensure that traffic on Android devices goes to the Google search engine.
“In this way, 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.”
In response, the technology giant said it would appeal against the Commission’s ruling.
“Android has created more choice for everyone, not less,” a tweet from the official Google Europe account said.
“A vibrant ecosystem, rapid innovation and lower prices are classic hallmarks of robust competition. We will appeal the Commission’s decision.”
Ms Vestager said Google now had 90 days to bring its conduct to an end or face penalty payments of up to 5% of the average daily worldwide turnover of Alphabet, the firm’s parent company.
The Commission has previously ordered Google to pay more than £2 billion over antitrust breaches linked to the firm’s online shopping comparison service.
Google is currently appealing against that decision.
Google chief executive Sundar Pichai said the Commission had overlooked the level of choice Android offered people.
“Today, the European Commission issued a competition decision against Android, and its business model. The decision ignores the fact that Android phones compete with iOS phones, something that 89 percent of respondents to the Commission’s own market survey confirmed,” he said.
“It also misses just how much choice Android provides to thousands of phone makers and mobile network operators who build and sell Android devices; to millions of app developers around the world who have built their businesses with Android; and billions of consumers who can now afford and use cutting-edge Android smartphones.
“We’ve always agreed that with size comes responsibility. A healthy, thriving Android ecosystem is in everyone’s interest, and we’ve shown we’re willing to make changes.
“But we are concerned that today’s decision will upset the careful balance that we have struck with Android, and that it sends a troubling signal in favour of proprietary systems over open platforms.
“Rapid innovation, wide choice and falling prices are classic hallmarks of robust competition and Android has enabled all of them.
“Today’s decision rejects the business model that supports Android, which has created more choice for everyone, not less. We intend to appeal.”