Google Hit with Whopping $5 Billion Fine
The European Union is fining Google $5.1 billion for antitrust violations related to its Android mobile operating system, CNBC reported
Google was ordered to stop its conduct with 90 days or face even more fines.
“Google has used Android as a vehicle to cement the dominance of its search engine,” said Europe’s antitrust chief Margrethe Vestager, according to The New York Times.
The Times framed the EU’s action as part of Europe’s battle to limit the clout of American technology companies.
“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 E.U. antitrust rules,” Vestager said.
The fine sets a new record, surpassing the $2.7 billion fine Google was hit with last year for favoring its shopping service over those of competitors.
In this case, the EU said Google forced smartphone makers to bundle Google apps like Chrome and Search with its app store, Play. The EU said deals with HTC, Huawei and Samsung required Google’s search bar and Chrome browser to be favored over others.
Google will appeal the ruling.
“Android has created more choice for everyone, not less,” read a statement from Google. “A vibrant ecosystem, rapid innovation and lower prices are classic hallmarks of robust competition.”
Vestager said that’s not the case. Google’s way of working “prevents device manufacturers from using any alternative version of Android that was not used by Google,” she said.
“Our decision stops Google from controlling which search and browser apps manufacturers can pre-install on Android devices or which Android operating system they can adopt,” she said.
“The vast majority of users simply take what comes with their device and don’t download competing apps. Or to slightly paraphrase what Milton Friedman has said ‘there ain’t no such thing as a free search,’” she said, according to The Guardian.
The ruling came in a case begun in 2015. One commentator said its impact remains unclear.
“Fast-moving markets are where competition law is most important,” said Jonathan Kanter, a former antitrust investigator for the Federal Trade Commission. But “when you have cases that are many years old, you’re fighting old battles instead of the next one.”
“To say that any single action by the European Commission is going to stop them is probably naïve,” he said. “But movements have to start somewhere, and good, strong, persistent, decisive action can over time have an effect.”
Early Wednesday, shares of Alphabet Inc. — the parent company of Google — were down 0.5 percent in pre-market trading, Bloomberg reported.
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