Google Hit With Record $5B Fine From EU Over Android Operating System

Yolanda Curtis
July 18, 2018

The Commission said it was issuing a fine of 4.34 billion euro (£3.9 billion) over restrictions placed on mobile phone manufacturers using Android to drive internet traffic to Google's own search engine.

Android is the world's most-used smartphone operating system and runs on about 80 percent of mobile devices worldwide.

The case against Android is the most significant of three complaints by the European Union against the search titan, which has already been hit with a record-breaking 2.4-billion-euro fine in a Google shopping case.

Google Search is pre-installed as the default web search service on most Android devices sold in Europe, closing off ways for rival search engines to access the market according to the European Union ruling.

Google denied engaging in anti-competitive practices.

The fine is the largest ever issued by the European Commission in an antitrust case and will surpasses the €2.42bn penalty issued to the Silicon Valley firm a year ago. Its representatives did not respond to requests for comment on Wednesday.

More significant than the blockbuster fine could be an accompanying order freeing up phone manufacturers to choose non-Google apps to install on Android phones.

Google has a long history of pushing back and it is likely to drag out its appeal against the fine.

Despite being a record fine, Alphabet generated about the same amount of money every 16 days in 2017, based on the company's reported annual revenue of $110.9 billion for the year.

Citing a "person familiar with the EU decision", Bloomberg said EU Competition Commissioner Margrethe Vestager informed Google CEO Sundar Pichai of the decision in a call yesterday.

Despite Google being adamant it isn't doing anything wrong, it has already made some concessions in Russian Federation where the consumer watchdog laid down similar claims. In this case, Vestager faulted Google for using Android as a means to solidify its strong foothold in search and advertising, while making it harder for rivals to offer competing apps and services. Android's code is open-source, meaning it can be tweaked and edited by device manufacturers.

Today's ruling, which was originally expected earlier this month but was postponed to avoid a clash with President Trump's visit to Europe, will bring an end to the EC's investigation into Google's Android OS.

The company's high payouts to app developers, coupled with its entrenched relationship with millions of advertisers, has turned Google into the main revenue source for many apps.

"Today's decision rejects the business model that supports Android, which has created more choice for everyone, not less".

The fine is based on the fundamentals of how Google's Android operating system operates. "We will appeal the Commission's decision".

Other reports by iNewsToday