The Industry

EU Hits Google With $5 Billion Fine for Breaking Antitrust Rules in Android Business

EU Commissioner Margrethe Vestager speaks at a podium.
EU Commissioner Margrethe Vestager said, “[Google’s] practices have denied rivals the chance to innovate and compete on the merits.” JOHN THYS/AFP/Getty Images

European Union regulators on Wednesday imposed a record-breaking 4.34 billion euro ($5 billion) fine on Google for breaking antitrust rules by using its Android phone business to “cement its dominant position in general internet search.” The European Commission also ordered Google to end its illegal practices within 90 days or face additional fines. Google has said it plans to appeal the decision.

“[Google’s] practices have denied rivals the chance to innovate and compete on the merits,” Margrethe Vestager, the European Commissioner for Competition, said in a statement. “They have denied European consumers the benefits of effective competition in the important mobile sphere.” Though the commission has been closely scrutinizing Android over the past year, the original complaint was actually filed in 2013 by a trade group called FairSearch that represented several of Google’s competitors, such as Microsoft and Nokia.

The fine takes into account three main violations of the EU’s antitrust rules. For one, regulators claim that Google has required Android device manufacturers to pre-install the Chrome and Google Search apps to be able to license the Play Store app marketplace. Vestager acknowledged at a press conference in Brussels that this requirement does not prevent users from downloading other search apps, but pointed out that only 1 percent of them ever end up doing so. The commission also took issue with payments the tech giant made to large hardware manufacturers and mobile network operators so that they would only pre-install the Google Search app onto their devices. Lastly, regulators accused Google of threatening to prohibit manufacturers from pre-installing its apps if they sold devices that had alternative “forked” versions of the Android system.

As the BBC points out, Google might be able to avoid such rule violations in the future by taking a page out of its response to similar complaints from Russian regulators. Russian Android users now have a choice between three different default search engines when they first use the Chrome browser.

Google CEO Sundar Pichai published a blog post rebutting the EU’s findings that said, in part, that “today’s decision rejects the business model that supports Android, which has created more choice for everyone, not less.” He further argued that it is easy to reconfigure or delete the pre-installed apps and that the regulators ignored Android’s competition with Apple’s iOS phones.

Vestager’s commission fined Google $2.7 billion in 2017 for manipulating search results to promote its Google Shopping feature. That ruling is still under appeal and likely won’t be settled for years. We can expect the same from the EU’s decision today.