EU Fines Google $5 Billion for Android Abuses
- Paul Thurrott
- Jul 18, 2018
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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.”
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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.”
Conversation 45 comments
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skane2600
<p>I wonder if Google competitors lobbied for this. Certainly that was the root of Microsoft's antitrust problems. Which is why those competitors were the primary beneficiaries of the process rather than the consumer. Of course some of them botched it by paying too much to buy the "injured" companies thus losing money overall on the process.</p>
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skane2600
<blockquote><a href="#293317"><em>In reply to lvthunder:</em></a></blockquote><p>The antitrust effort was pitched as pro-consumer. </p>
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skane2600
<blockquote><a href="#293322"><em>In reply to MikeGalos:</em></a></blockquote><p>My recollection is that the main OEM issue was Microsoft's exclusivity agreements. An OEM would have to pay a higher price for Windows if they offered even one model of PC with a non-Microsoft OS. As it ultimately turned out however, the court didn't really require Microsoft to stop the practice. </p><p><br></p><p>Instead, the settlement had a more narrow restriction, not allowing Microsoft to retaliate against OEMs including for:</p><p><br></p><p>"shipping a Personal Computer that (a) includes both a Windows Operating System Product and a non-Microsoft Operating System, or (b) will boot with more than one Operating System;"</p><p><br></p><p>Note that it doesn't say Microsoft can't retaliate against OEMs who ship a PC with ONLY a non-Microsoft operating system. </p><p><br></p><p>And of course, the economic pressure on OEMs to not ship computers with, for example, Linux as the only OS, harms consumers who wish to have a preconfigured Linux PC without the bloat (from these particular users' perspective) of Windows.</p><p><br></p>
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skane2600
<p>A novel argument that Google could make would be that today, smartphones and PCs are really in the same market, so the combined market share of Windows, MacOS, and Linux means Google doesn't have monopoly power. I don't buy that, but isn't that the basis for claiming that we are in a Post-PC world and that smartphones are worthy replacements for PCs?</p>