Google hit with record-breaking $5 billion fine over Androi…

Google has been hit with a record-breaking €4.34bn (£3.87bn) fine from the European Union for anticompetitive ”illegal practices” relating to its Android operating system.

The European Commission says the company has used the software to unfairly expand its dominance over all other search engines and had “denied European consumers the benefits of effective competition”.

The $5 billion USD charge, which Google will appeal, amounts to the biggest fine ever imposed by a regulator against a single firm.

At a press conference in Brussels on Wednesday afternoon EU competition Commissioner Margrethe Vestager said Google had used its clout to make Android phones “locked down in a Google-controlled ecosystem”.

The Commission says Google required manufacturers to pre-install Google search and browser apps if they wanted their phones to have access to the Google app store.

It also says the company paid manufacturers and network operators to keep other competitor search engines off their phones, and thirdly “obstructed the development of competing mobile operating systems which could have provided a platform for rival search engines to gain traffic”. Android accounts for 74 per cent of the mobile market.

The European competition authority says the company must “bring its illegal conduct to an end within 90 days in an effective manner” or face additional penalty charges.

Any company is welcome to do business in our single market but they need to comply, they need to play by EU anti-trust rules

Margrethe Vestager, EU competition commissioner

Google confirmed that it will appeal the decision.

“Android has created more choice for everyone, not less,” a spokesperson for the company said. “A vibrant ecosystem, rapid innovation, and lower prices are classic hallmarks of robust competition. We will appeal the Commission’s decision.”

The US tech giant is already in the process of challenging a previous fine by the European Commission, which it levied based on Google’s alleged anti-competitive practices around its price comparison tools. Since that fine was imposed the company has made changes to the way it displays search results; it is unclear whether any similar changes will be made to Android.

The Commission says Google has “effectively” already paid the previous fine because it has paid bank guarantees into a closed account. If the appeal fails the money will be sent to EU member states’ to spend as they wish, using the same formula as EU contributions are made under.

Ms Vestager is also still running a third investigation into the company, looking at the AdSense technology used to place adverts.

The latest charge takes the total fine from the EU’s recent antitrust investigations to $6.7 billion. It may be hit by yet another substantial fine when the third investigation concludes.

Ms Vestager told reporters in Brussels: “Google has used Android as a vehicle to cement its dominance as a search engine. These practices have denied rivals a chance to innovate and to compete on the merits. They have denied European consumers the benefits of effective competition in the very important mobile sphere. This is illegal under EU antitrust rules.”

She said that pre-installing Google search on its devices was “an advantaged that cannot be matched” by competitors, making it harder for rivals to compete fairly and harming consumers.

“Any company is welcome to do business in our single market but they need to comply, they need to play by EU anti-trust rules and these rules are set in place for very simple reasons: to protect European consumers and effective competition,” Ms Vestager said.

She added that it was important that “technology serves us, and not the other way around”.

The fine is worth roughly the same as the amount contributed to the EU each year by the Netherlands. But it only accounts for around half a month of revenues for Alphabet, Google’s parent company.

The huge charge is likely to inflame tensions between the European Union and the United States; the two economies have been locked in a nascent trade war since Donald Trump imposed tariffs on European steel earlier this year.

Europe’s stern treatment of US technology giants has been high up on the list of concerns of US trade officials, who see the tough approach as backdoor protectionism. European Commission president Jean-Claude Juncker is set to visit the White House for talks with Mr Trump next week.

The Commissioner downplayed the potential for conflict with United States over the fine, stating that “US colleagues want fair competition just as well as we do”.

“There is a respect that we do our job.  This is also my impression, that this is what they want in the US,” she said

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