EU fines Google massive €4.34bn
• US titan fined €4.34bn for using Android to push its search brands
The EU has slapped Google with a huge €4.34bn fine for abusing the dominance of its Android operating system in the biggest antitrust penalty in the bloc’s history.
The EU slapped Google with a huge €4.34bn fine for abusing the dominance of its Android operating system on Wednesday in the biggest antitrust penalty in the bloc’s history.
EU Competition Commissioner Margrethe Vestager said the US tech giant illegally used Android’s near monopoly to boost usage of its own search engine and browser.
The decision, which follows a three-year investigation, comes as fears of a transatlantic trade war mount due to US President Donald Trump’s decision to impose tariffs on European steel and aluminium exports.
“Google has engaged in illegal practices to cement its dominant market position in internet search,” Vestager told a press conference in Brussels.
SHOPPING SERVICE
Vestager, who has taken on a string of Silicon Valley titans as EU antitrust chief, said Google “must put an effective end to this conduct within 90 days or face penalty payments” of up to 5% of its average daily turnover.
The new sanction nearly doubles the previous record EU antitrust fine of €2.4bn, which also targeted Google, for the Silicon Valley titan’s shopping comparison service in 2017.
Google immediately said it would appeal against the fine. “Android has created more choice for everyone, not less,” Google spokesman Al Verney said in a statement.
“A vibrant ecosystem, rapid innovation and lower prices are classic hallmarks of robust competition. We will appeal the commission’s decision.”
Former Danish cabinet minister Vestager spoke by phone with Google CEO Sundar Pichai on Tuesday night to tell him about the decision in advance.
Vestager said Google had shut out rivals by forcing major phone makers including South Korea’s Samsung and China’s Huawei to preinstall its search engine and Google Chrome browser, freezing out rivals.
They were also made to set Google Search as the default, as a condition of licensing some Google apps. As a result Google Search and Chrome are preinstalled on the “significant majority” of devices sold across the EU, the European Commission says.
Google prevented manufacturers from selling smartphones that run on rival operating systems based on the Android open source code, it said. Google gave “financial incentives” to manufacturers and mobile network operators if they preinstalled Google Search on their devices.
Google provides Android free to smartphone manufacturers and generates most of its revenue from selling advertisements that appear along with search results.
Under EU rules Google could have been fined up to 10% of parent company Alphabet’s annual revenue, which hit $110.9bn in 2017.
Vestager’s campaign against Silicon Valley giants in her four years as the 28-nation EU’s competition commissioner has won praise in Europe but angered Washington.
Brussels has repeatedly targeted Google over the past decade amid concerns about the Silicon Valley giant’s dominance of internet search across Europe, where it commands about 90% of the market.
As well as the Android and Google Shopping files, it has a third investigation under way, into Google’s AdSense advertplacing business.
Vestager’s other major scalps include Amazon and Apple. The EU ordered Apple in 2016 to pay Ireland €13bn in back taxes that the maker of iPhones had avoided by a tax deal with Dublin.
It has also taken on Facebook over privacy issues after it admitted that millions of users may have had their data hijacked by British consultancy firm Cambridge Analytica, which was working for Trump’s 2016 election campaign.
But Brussels has had US technology giants in its sights for more than a decade.
It imposed a huge €497m fine on Microsoft in 2004 for anticompetitive behaviour and ruled it must make changes to its Windows system.
The Google decision comes just a week before European Commission chief Jean-Claude Juncker is due to travel to the US for crucial talks with Trump on the transatlantic tariffs dispute and other issues.
Tension is also high over Trump’s berating of Nato allies on defence spending at a summit last week; over his summit with Russian leader Vladimir Putin; and over the US president’s pullout from the Iran nuclear agreement and Paris climate deal.