14 DAY TRIAL // A massive €4.3 billion fine was just levied against Google by the European Union for their monopoly-like tactics and for breaching EU antitrust rules.
Google is in a dominant position, and nobody can really dispute that. Even if they have a lot of competition from the likes of Apple, they are still the most powerful company when it comes to mobile devices, ad revenues, and pretty much everything else.
If the company just pursued their goal of making money from selling Android for manufacturers, and from ad placement around the Internet, it would have been difficult to build a case against them. Instead, they used their powerful position to increase their profits and to bully the competition into accepting their terms. At least, this is what the European Commission is saying about Google.
The largest fine against a single company
Probably the most significant criticism against Google (and implicitly to its parent company, Alphabet), was that its stifling competition, which in turn eventually works against the consumers. And that is a really big no-no in the European Union. It’s also one of the reasons why Microsoft was fined as well in the past.
The European Commision has identified three problems with Alphabet’s approach and has laid them out in a press release.
- 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); - made payments to certain large manufacturers and mobile network operators on condition that they exclusively pre-installed the Google Search app on their devices; and - has prevented manufacturers wishing to pre-install Google apps from selling even a single smart mobile device running on alternative versions of Android that were not approved by Google (so-called "Android forks").
Furthermore, the fine alone won’t do, as Commissioner Margrethe Vestager, in charge of competition policy, explained. All of these practices need to stop within 90 days, or they will face penalty payments of up to 5% of the average daily worldwide turnover of Alphabet.
Google denies everything
The company is denying everything, as it was to be expected. You would think that the accusations and the fine are based on a clear-cut interpretation of what’s happening on the market.
On the other hand, Google is saying that the European Commission simply doesn’t understand who the ecosystem works, and why things are the way they are. Google is also reporting that they have never forced manufacturers to integrate their apps, which was also one of the accusations.
It’s very likely that the fine will be contested in court, and it will be a long legal battle. If the fine stands, we might see some important changes in the Android ecosystem. Whether they will be for the best remains to be seen.