Google hit with $6.68 billion fine in EU Android antitrust case, says it will appeal

Google’s Sundar Pichai has said that Android has created more choice for users

Google HQ

Mountain View-based search giant Google has been hit with a record-breaking €4.34 billion (roughly $6.68 billion CAD) fine for breaking European Union (EU) antitrust laws through the company’s Android mobile operating system.

According to the EU, Google’s Android operating system violated antitrust laws by allowing the Mountain View company to abuse its market dominance in three specific areas.

First, Google required that device manufacturers pre-install the Google Search app and Chrome app if they want to provide device users with licensed access to the Google Play Store.

Second, Google made payments to “certain large manufacturers and mobile networks operators” to exclusively pre-install the Google Search app on devices.

Finally, Google prevented device manufacturers from pre-installing Google apps, like Gmail and Google Drive, on devices that run “alternative versions of Android that were not approved by Google (so-called ‘Android forks’).”

“These have enabled Google to use Android as a vehicle to cement the dominance of its search engine,” reads an excerpt from a July 18th, 2018 EU media release.

Google now has 90 days to adhere to the EU’s demands and unbundle Google Search from Google Chrome in Android.

Google to appeal

In a July 18th, 2018 media release, Google CEO Sundar Pichai said that his company plans on appealing the EU’s decision.

“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,” said Pichai.

“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.”

According to numbers provided by Google, approximately 1,300 different brands use Android to provide buyers with approximately 24,000 different models of smartphone.

Pichai added that device manufacturers aren’t bound to sign up for Google’s Android usage rules.

“No phone maker is even obliged to sign up to these rules—they can use or modify Android in any way they want, just as Amazon has done with its Fire tablets and TV sticks,” said Pichai.

It’s worth noting that Google’s parent company Alphabet reported a Q1 2018 revenue of $31.35 billion USD. Alphabet’s total assets as of March 31st, 2018 are approximately $206.9 billion USD.

If Google were to pay the EU’s latest fine, the company would be able to recover its losses in roughly two weeks.

The EU’s July 18th fine is almost double the Union’s previous antitrust fine against Google.

Google was fined €2.42 billion (approximately $3.72 billion CAD at the time of writing) in 2017 for violating antitrust laws over shopping searches.

Google stock currently sits at $1,213.23 USD, at the time of publication.

Source: European UnionReuters