Google has been under investigation of the European Commission (EC) regarding breach of European Union (EU) antitrust rules for several years now. These laws are in place to ensure that fair competition is maintained among business corporations for the benefit of consumers. Over a year ago, the tech giant was fined €2.42 billion ($2.7 billion at the time) for 'abusing market dominance as a search engine', despite its dismissal of any wrongdoings. About a week later, the EC formed a panel of experts, with the issuance of another huge fine under consideration.
Today, the commission has imposed a fine of €4.34 billion ($5.04 billion) on Google, regarding three types of restrictions imposed by the company on Android device manufacturers and network operators as illegal under EU antitrust rules.
Margrethe Vestager, European Commissioner for Competition, commented on the case, noting:
"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."
She further went on to state how these restrictions have denied consumers the opportunity to benefit from a healthy competition between the tech giant and its rival, deeming any such practices illegal.
The EC explained that although market dominance is not illegal, dominant companies are not allowed to abuse their powerful position by restricting competition. The three types of practices that served to advance Google's influential position in the internet search sphere have been identified as such:
- Illegal tying of Google's search and browser apps
- Illegal payments conditional on exclusive pre-installation of Google Search
- Illegal obstruction of development and distribution of competing Android operating systems
The commission has concluded that through these contractual restrictions, the tech giant has been able to cement its dominance "in the market for general internet search services, licensable smart mobile operating systems and app stores for the Android mobile operating system". Furthermore, it has been clarified that this decision is not supposed to show Android or the open-source model in bad light.
In light of the negative effects these practices have caused to innovation through competition in the mobile space in general, a fine of €4,342,865,000 has been imposed, with Google's revenue from search advertising services on Android devices in the EEA being taken into account. In addition, the company is required to effectively end the aforementioned restrictions within 90 days, otherwise it will be required to pay non-compliance penalties of up to 5% of the average daily worldwide turnover of its parent company, Alphabet.
Earlier this year, Google was fined ₹1.36bn by the Competition Commission of India for search bias as well. With yet another hefty fine being imposed on the firm, it will be interesting to see how this could potentially affect Android devices in the future. Presumably, the tech giant could find itself obligated to not force manufacturers into pre-installing Google services on their devices, resulting in long term revenue losses, aside from the immediate payment required by law of course.