EU fines Google $6.7B over practices
BRUSSELS The European Union fined Google a record $6.7 billion Wednesday for forcing cellphone makers that use the company’s hugely popular Android operating system to install Google apps.
The EU said the practice restricts competition and reduces choices for consumers.
The fine, which caps a three-year investigation, is the biggest ever imposed on a company by the EU for anticompetitive behaviour.
It is likely to stoke tensions between Europe and the U.S., which regulates the tech industry with a lighter hand and has complained that the EU is singling out American companies for punishment.
Google immediately said it will appeal. Android has “created more choice for everyone, not less,” Google CEO Sundar Pichai tweeted.
In its ruling, the EU said Google broke the rules when it required mobile phone makers to preinstall the Google Search and browser apps if they wanted to use Google’s app store. Google also paid big producers to exclusively pre-install the Google Search app.
European Union Competition Commissioner Margrethe Vestager said that given the size of the company, the 4.34 billion euro ($6.66 billion) fine is not disproportionate. The penalty is on top of 2.42 billion euro ($3.71 billion) fine that regulators imposed on Google a year ago for favouring its shopping listings in search results.
The latest fine is well within Google’s means. Its parent company, Alphabet, made US$9.4 billion in profit in the first three months of the year and reportedly had over US$100 billion in cash reserves.
Android is an open-source operating system that Google lets cellphone makers use for free. As a result, it is the most widely used system, beating even Apple’s iOS. The EU says Google has market share exceeding 90 per cent in most European countries.
The EU wants to ensure that phone makers are free to preinstall apps of their choosing and allow for competition in services such as internet searches. It also wants cellphone makers to be able to more easily use altered versions of Android.