Regulators from the European Commission issued a record $5 billion antitrust fine to Google today, asserting that the search giant has abused its power in the smartphone market.
“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,” EU Competition Commissioner Margrethe Vestager said in a prepared statement. “Google has used Android as a vehicle to cement the dominance of its search engine. 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 EU antitrust rules.”
Those three types of restrictions, the EU says, are:
- Google requires hardware makers to pre-install the Google Search app and Chrome web browser as a condition for licensing Google’s mobile app store, the Google Play Store.
- Google pays “certain large manufacturers and mobile network operators” to exclusively pre-install the Google Search app on their devices.
- Google prevents hardware makers that want to pre-install Google apps from selling even a single mobile device running on alternative Android versions (or “forks”) that were not approved by Google.
The EU says that Google has imposed these illegal restrictions on Android device makers and mobile network operators since 2011, and it has done so to illegally “cement its dominant position in general Internet search.”
Google now has 90 days to change its business practices or it will face a daily fine of up to 5 percent of the average daily worldwide turnover of Alphabet, Google’s parent company, the EU says.
Google, predictably, says it will appeal, and given the speed at which justice works in Europe, this case will continue to be dragged out for several years.
“The [EU] decision ignores the fact that Android phones compete with iOS phones,” Google CEO Sundar Pichai writes in an op-ed piece on an official Google blog. “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.”