The European Commission has slapped Google with a record-breaking fine of $5 billion for violating anti-trust laws. The European Commission says Google has abused its position in three major areas. Google has been compulsorily bundling Search and Chrome with its Play Store and operating system. It has blocked phone manufacturers from running forked versions of Android and it has paid phone manufacturers (like Apple) and service providers to “exclusively pre-install the Search app on their devices.”
The commission now requires Google to bring a stop to these violations within three months. It has threatened to slap it with another fine amounting to 5% of Google’s average daily revenue, in case the company does not comply with the commission’s ruling. It has also stated that Google will become liable to face suits by “any person or business affected by its anti-competitive behaviour.”
EU regulators are pissed with Google
Google now has to stop forcing manufacturers to pre-install Chrome and Google search in order to offer the Google Play Store on handsets, the commission has found that bundling has “reduced the ability of rivals to compete effectively with Google” and concluded that Google’s defense of bundling was not “well-founded”. Google told the commission bundling is necessary in order to monetise its investment in Android. Google will also need to stop preventing phone makers from using forked versions of Android, as the commission says Google “did not provide any credible evidence that Android forks would be affected by technical failures or fail to support apps.” Google also propped up the forwarding of the “Android ecosystem” as to why it makes payments to mobile phone manufacturers to exclusively preinstall the Search App. The commission dismissed Google’s claim that “payments based on exclusivity were necessary to convince device manufacturers and mobile network operators to produce devices for the Android ecosystem.”
Google will appeal, says Android creates choice
Google now says it will appeal the decision. “Android has created more choice for everyone, not less. A vibrant ecosystem, rapid innovation, and lower prices are classic hallmarks of robust competition,” a Google spokesperson told the media. “We will appeal the Commission’s decision.”
Google CEO Sundar Pichai has defended the company in a blog post. Pichai says the commission with its decision has overlooked “how much choice Android provides” to phone makers and service providers. He also says phones now comes with apps apart from those of Android and users can “easily disable or delete them, and choose other apps instead.” Google also warned that the EU’s decision may affect the free business model of Android: “So far, the Android business model has meant that we haven’t had to charge phone makers for our technology, or depend on a tightly controlled distribution model.”
The European Commission began investigating Android closely over the past year after rivals complained that Google has been abusing its market dominance in software that runs on smartphones. A group of software giants including FairSearch, Nokia, Microsoft, and Oracle originally filed a complaint against Google back in 2013 for creating a monopoly using Android as its springboard. Former Microsoft CEO Steve Ballmer also called Google a “monopoly” at the time, one that authorities should come under scrutiny. While Google and Microsoft ended their Android patent disagreements a few years ago, the EU has gone ahead to investigate the original allegations.
The $5 billion fine dwarfs Google’s previous $2.7 billion (also record-breaking) fine from the EU last year over manipulated search results. Facebook, Intel, and Microsoft have all faced significant anti-competition fines from the European Commission. Microsoft was famously fined twice by the EU after the software maker failed to include a browser ballot in a Windows 7 update. Apple was also ordered to pay back $15.4 billion in taxes to the European Union.
India’s anti-trust regulator also fined Google
Back in February, the Competition Commission of India (CCI) imposed a fine of Rs.135.86 crore or nearly $21 million on Google for “search bias” and abusing its “dominant position” in the market in contravention with India’s anti-trust laws. The allegations largely revolved around the design of the Google search engine result page, along with alleging that the company was leveraging its dominance in web search to strengthen its position in online syndicate search services, as competitors were denied access to the market.