Google Fined $5 Billion By EU For Illegal Android Practices

19 July, 2018, 10:26 | Author: Shannon Aguilar
  • EU news Google Android fine

European antitrust regulators fined Google a record 4.34 billion euro (S$6.9 billion) on Wednesday and ordered it to stop using its popular Android mobile operating system to block rivals, a ruling which the USA tech company said it would appeal.

Regardless of what Pichai thinks, Google has 90 days make amends or it risks incurring further penalty charges - which could amount to up to 5 percent of Alphabet's daily turnover each day.

The EU's decision would bring the running total of Google fines to 6.7 billion after last year's penalty over shopping-search services. In a blog post, Google's CEO, Sundar Pichai, wrote that the commission ignored "the fact that Android phones compete with iOS phones", adding that the decision did not consider the choice Android offers to phone makers, mobile network operators, app developers and consumers.

European Union officials have been investigating Google contracts that require manufacturers of Android phones to take Google's search and browser apps and other Google services when they want to license the Play app store, which officials say is a "must-have" for new phones.

"Google has used Android as a vehicle to cement the dominance of its search engine".

He also defends the company's app bundling, arguing it's easy for users to install alternatives if they don't want to use Google's pre-installed options. "It has been calculated on the basis of the value of Google's revenue from search advertising services on Android devices in the EEA".

Implications of this decision could lead to a variety of scenarios. It may also mean that a device maker will be free to install any other forked or old version of Android as they wish. Additionally, the latter paid a huge sum of money to OEMs and network operators to ensure they installed Google Search as the exclusive search app on their devices.

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With its cash reserves and short-term investments for the quarter ending March reported to be at $103 billion, the $5 billion dollar fine appears "affordable" for the tech behemoth.

The U.S. tech company said it would appeal. Google has failed to fix its shopping service as dictated in the ruling, and the company is in the process of appealing it.

"The complaint dragged on for five years because Google used every trick in its book to delay action", said Thomas Vinje, counsel to FairSearch.

"With any antitrust enforcement that goes to unilateral conduct, the remedy is not going to do much unless you fix the problem early", said antitrust lawyer Gary Reback to CNBC.

While Google can easily afford the fine, the ruling could hurt the company's business model, which relies on giving away its operating system in return for opportunities to sell ads and other products.

Nonetheless, the fine accounts for about 40% of Alphabet's 2017 net profit of $12.62 billion, and ordered changes to Android OS, which runs on more than 80% of all smartphones, could undermine Google's booming mobile-phone business. Regulators in other markets may also take cues from the developments where a large population is new to mobile use, including in India, Southeast Asia, Africa and Latin America.



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