Google fined RECORD €4.3bn by European Union after market dominance investigation

Posted July 19, 2018

This morning, Google was hit with an enormous $5.06 billion fine for what the European Commission considers to be anti-competitive practices - specifically, those that push users toward Google's own apps and services.

The fine, which had been widely expected this week, is 4.34 billion euros, or about $5 billion.

As for Google Search, Android users wouldn't necessarily have built-in native access to things like Google Assistant artificial intelligence (AI) voice assistant or the Google Search bar that often comes pre-installed on an Android phone's home screen.

The fine pertains to Google allegedly imposing illegal restrictions on Android device manufacturers and mobile network operators "to cement its dominant position in general internet search", according to a commission statement.

Google's practices have denied rival search engines the possibility to compete on the merits. Across Europe, 90 per cent of the markets studied by the Commission were dominated by Google.

The EU says Android is used on around 80 percent of mobile devices, both in Europe and worldwide. Google's CEO Sundar Pichai says the company will appeal.

This fine is the EU's largest punishment ever imposed on a tech firm.

The European Commission also hit Google with a separate antitrust penalty of $2.7 billion a year ago, relating to violations in the way it presents shopping results in Google Search-a service with a market share in Europe of over 90%. (Google has appealed the amount of that fine.) The much higher figure reflects the fact that search has a much bigger impact than shopping on Google's bottom line.

The European Commission gave the internet search firm 90 days to stop the practice or face a penalty of up to five per cent of the average daily turnover of the firm's parent company, Alphabet. "A vibrant ecosystem, rapid innovation and lower prices are the classic hallmarks of robust competition".

Google forcefully objects to the ruling, calling it a a rejection of Android's entire business model. You can see the full response by clicking the link below this story.

In particular, Google has required manufacturers to pre-install the Google Search app and browser app (Chrome), as a condition for licensing Google's app store (the Play Store).

The latest fine is almost double the previous one of 2.4 billion euros, which was also against Google in 2017 in the online shopping comparison case. "This harmed competition by significantly reducing their incentives to pre-install competing search apps".

Android is the most popular mobile software in the world. National competition authorities met earlier on Tuesday to agree on the fine, one person said. It also prevented manufacturers from selling devices running on alternative versions of its Android operating system. "The Commission would have to determine such non-compliance in a separate decision, with any payment backdated to when the non-compliance started", it said.