Tech Giant Google has been handed a record fine in Europe overnight after breaching EU antitrust laws.
First of all, anti trust laws are a set of competition regulations which are in place in most developed economies. They aim to prevent a monopoly situation where one firm has too much dominance in a particular market and is able to abuse their position to eliminate competition from other firms.
The European Commission in issuing the fine held that Google has been unfairly using the Android platform to strengthen its search engine traffic. The Commission outlined three areas in which Google has exploited its Android dominance:
- It 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);
- It made payments to certain large manufacturers and mobile network operators on the condition that they exclusively pre-installed the Google Search app on their devices;
- It 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”).
“In this way, Google has used Android as a vehicle to cement the dominance of its search engine.” the report read.
Essentially, the Commission believes that these actions deny competitors the ability to innovate and compete in the market and leaves consumers without the benefits of this competition. After this ruling, Google has 90 days to cease these abusive practices or it will face penalty payments of up to 5% of the average daily worldwide turnover of Alphabet, Google’s parent company.
Google naturally isn’t happy at all with the decision, releasing a blog post discussing the benefits of Android and the choices its created for consumers.
“Android has created more choice for everyone, not less. A vibrant ecosystem, rapid innovation, and lower prices are classic hallmarks of robust competition. We will appeal the Commission’s decision.” the company said in a tweet.
One will wonder how much impact this decision will really have, given Google’s pre-established dominance of this market and its ability to pay fines of this nature with relative ease. But if the appeal is to fail, it will stop Google from forcing phone companies to bundle up google search apps in Android devices.
Interesting scenes out of Brussels.