Google Ap­peals $5 Bil­lion EU Fine in An­droid Case

L'Opinion - - The Wall Street & I'Opinion - Sam Schech­ner

Al­pha­bet Inc.’s Google on Tues­day said it fi­led an ap­peal of the Eu­ro­pean Union’s €4.34 bil­lion ($4.97 bil­lion) an­ti­trust fine for al­le­ged­ly abu­sing the do­mi­nance of its An­droid ope­ra­ting sys­tem for mo­bile phones.

But Google said it has no plans to ask for so-cal­led in­ter­im mea­sures to pause ap­pli­ca­tion of the de­ci­sion. Wi­thout fur­ther ac­tion, Google will have to meet a dead­line at the end of Oc­to­ber to end the be­ha­vior the EU says is an­ti­com­pe­ti­tive or face ad­di­tio­nal fines of up to 5 % of ave­rage dai­ly glo­bal re­ve­nue for each day it doesn’t com­ply.

Google had pro­mi­sed that it would ap­peal the de­ci­sion when the Eu­ro­pean Com­mis­sion, the bloc’s an­ti­trust re­gu­la­tor, de­li­ve­red it in mid-Ju­ly. The com­mis­sion said that Google broke the block’s com­pe­ti­tion laws in part by strong-ar­ming phone ma­kers that use its free An­droid ope­ra­ting sys­tem to pre-ins­tall its na­me­sake search en­gine, from which the com­pa­ny makes the bulk of its ad­ver­ti­sing re­ve­nue.

A spo­kes­man for Google de­cli­ned to make the ap­peal pu­blic or com­ment on what grounds the com­pa­ny ci­ted in its de­fense. Ins­tead the com­pa­ny re­fer­red to a blog post it pu­bli­shed in Ju­ly, fol­lo­wing the EU’s de­ci­sion, ar­guing that An­droid has boos­ted com­pe­ti­tion among mo­bile phone ma­kers.

Re­pre­sen­ta­tives for the Eu­ro­pean Com­mis­sion didn’t im­me­dia­te­ly re­spond to a re­quest for com­ment.

Google’s ap­peal is the la­test volley in a se­ries of ac­tions that Eu­ro­pean re­gu­la­tors and le­gis­la­tors are di­rec­ting at big tech com­pa­nies – ma­ny led by EU an­ti­trust com­mis­sio­ner Mar­grethe Ves­ta­ger, who has emer­ged as one of the most avid glo­bal re­gu­la­tors for big tech firms. Google is al­rea­dy ap­pea­ling her 2017 de­ci­sion that fi­ned Google €2.43 bil­lion for al­le­ged­ly abu­sing the po­wer of its search en­gine to fa­vor its own ser­vice to show pro­duct ads on be­half of on­line re­tai­lers.

The Eu­ro­pean Com­mis­sion is al­so in­ves­ti­ga­ting Ama­zon. com Inc.’s treat­ment of third­par­ty mer­chants that sell goods via Ama­zon’s on­line store, while the bloc’s le­gis­la­tors are consi­de­ring new co­py­right and tax rules ai­med at rei­ning in big tech firms.

In the An­droid case, the Eu­ro­pean Com­mis­sion has or­de­red Google to stop ma­king phone ma­nu­fac­tu­rers preins­tall its search app and the Chrome web brow­ser if they want to pre-ins­tall Google’s Play store, which is the main way to down­load An­droid apps. The bloc al­so or­de­red Google to end res­tric­tions that dis­cou­rage ma­nu­fac­tu­rers from sel­ling de­vices that run unof­fi­cial ver­sions of An­droid. It contends both res­tric­tions ille­gal­ly constrai­ned com­pe­ting search en­gines and ope­ra­ting sys­tems.

Google has ar­gued that An­droid, which is free for ma­nu­fac­tu­rers to use, has in­crea­sed com­pe­ti­tion among smart­phone ma­kers, lo­we­ring prices for consu­mers. The com­pa­ny has said the al­le­ga­tion that it sty­mied com­pe­ting apps is false be­cause ma­nu­fac­tu­rers ty­pi­cal­ly ins­tall ma­ny ri­val apps on An­droid de­vices, and consu­mers can ea­si­ly down­load others.

Beyond the fine, it is an open ques­tion what ef­fect the EU’s de­ci­sion will have on Google’s bu­si­ness or the mo­bile phone eco­sys­tem. On one hand, An­droid has hel­ped Google build its mo­bile-phone bu­si­ness and any­thing that un­der­mines its po­wer there could create op­por­tu­ni­ties for com­pe­ti­tors and slash its re­ve­nue.

By the same to­ken, Google search and Chrome are ve­ry po­pu­lar in their own right. Ana­lysts have said consu­mers are li­ke­ly to seek them out from an app store even if they we­ren’t pre-ins­tal­led on their phones – mea­ning the EU ru­ling could pose less of a threat to Google’s mo­bile-bu­si­ness mo­del.

SIPA PRESS

EU Com­mis­sio­ner Mar­grethe Ves­ta­ger du­ring a press confe­rence on a Com­pe­ti­tion Case in­vol­ving Google An­droid in Brus­sels, on Ju­ly 18, 2018.

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