Google received a record 4.3 billion-euro antitrust fine from the European Union and was ordered to change the way it puts search and web-browser apps onto Android mobile devices, according to Bloomberg.
The penalty, the same amount the Netherlands contributes to the EU budget every year, is far higher than any other dished out by the U.S., Chinese or other antitrust authorities. More significantly, Google was given until mid-October to stop what the EU called "illegal practices" on contracts with handset manufacturers that push its services in front of users. It faces daily fines of 5 percent of revenue if it doesn’t obey.
“Google has used Android as a vehicle to cement the dominance of its search engine," EU Competition Commissioner Margrethe Vestager told reporters. “These practices have denied rivals the chance to innovate and compete on the merits." Google immediately said it would challenge the ruling at the EU courts. An appeal wouldn’t change its need to comply with the EU order, unless it gets judges to allow "interim measures" that halt the commission findings.
In a statement posted online, Google CEO Sundar Pichai said the EU decision “rejects the business model that supports Android, which has created more choice for everyone, not less.“ Users can easily disable or delete apps that are loaded on their phone and Google only earns revenue "if our apps are installed and if people choose to use our apps instead of the rival apps," he said.
Vestager said it was “solely“ up to Google to determine how it can comply with the EU order. “The obvious minimum“ is that the “contractual restrictions disappear,“ she told Bloomberg TV in an interview. She wouldn’t be drawn on how Google could or should change the way it distributes apps and makes money from the Android software it gives away. Google declined to say what changes it might make to comply with the EU order.
The EU’s decision would bring the running total of Google fines to about 6.7 billion euros. The EU said Google ensures that Google Search and Chrome are pre-installed on "practically all Android devices" sold in Europe. Users who find these apps on their phones are likely to stick with them and "do not download competing apps in numbers that can offset the significant commercial advantage derived on pre-installation.“
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