NEWSBYTE The European Commission (EC) has hit Google with its largest ever fine, €4.3 billion ($5.07 billion), for antitrust violations relating to its Android mobile operating system.
The EC said that Google had used Android, the world’s most popular mobile OS, to unfairly strengthen its dominance in search by forcing phone makers to pre-install both Google Search and the Chrome browser, hindering rivals and damaging consumer choice.
Google’s actions “have denied European consumers the benefits of effective competition in the important mobile sphere,” said Europe’s competition commissioner, Margrethe Vestager. “This is illegal under EU antitrust rules.”
Google will take the fine as a charge in Q2, reducing GAAP net income and earnings per share by the full amount. The company’s Q1 revenues were $9.4 billion, against $5.4 billion in the previous year.
Google’s position has long been that its products boost the global digital economy and reduce the cost of hardware for all consumers – a broad defence that it has used against every kind of criticism, including of its tax affairs.
“The problem for Google is the conditions that it puts on using Android,” said Damien Geradin, partner with Euclid Law, a Brussels law firm that previously represented Microsoft in its own antitrust battles with the EC. “Google says that Android is open source, but that’s just not the case.”
The company has vowed to appeal against the ruling, and the US Federal Trade Commission has said it will examine the details of the fine closely.
Today’s record fine is merely the latest salvo in a long-running battle between European authorities and Google – not to mention with other US technology behemoths, such as Apple and Microsoft.
Last year, the EC levied a €2.4 billion ($2.8 billion) fine against Google for favouring its own price comparison services over those of rivals. Google is appealing against that decision.
Internet of Business says
One of the drivers behind GDPR was Europe’s belief in the need to create a hedge against US technology dominance in Europe, and to restrict the power of US giants, such as Google/Alphabet, Apple, Microsoft, and Facebook, over consumer data.
However, while Google might believe that Europe is unfairly penalising US companies, it is worth remembering that some US companies have been behind complaints to the EC about Google’s business practices, including Microsoft and Oracle.
Meanwhile, tensions are building between the US and Europe in broader terms, as the US pursues a trade war with China that may also hit European companies, such as automakers, with punitive trade tariffs.
The situation was hardly helped by US president Donald Trump describing Europe as “a foe” in an incendiary interview before his appearance alongside Vladimir Putin in Helsinki this week.