Published: Thu, July 19, 2018
Finance | By Cynthia Curry

Google Fined a Record $5 Billion for Antitrust Violations

Google Fined a Record $5 Billion for Antitrust Violations

On Wednesday, the European Commission (EC) - a group tasked with enforcing European Union (EU) laws - fined Google €4.34 billion ($5 billion) for breaking the EU's antitrust laws in the mobile industry.

The EU is also now investigating Google in another antitrust case relating to its AdSense service. Specifically, the commission said Google used illegal practices regarding Android devices to bolster its dominant position in the search engine market. These practices have denied rivals a chance to innovate and to compete on the merits.

Explaining the ruling during a press conference in Brussels, EU Competition Commissioner Margrethe Vestager explained the multiple points on which Google is fined.

"The Commission's Android decision ignores the new breadth of choice and clear evidence about how people use their phones today".

Pichai asserts that the EC failed to consider that Android does have at least one major competitor in the mobile market: Apple's iOS.

Google said it would appeal the fine.

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He also pointed out that no Android smartphone OEM is obligated to use Google apps and that they can modify Android in any way they prefer. Also true. What he doesn't address is how not agreeing (and thereby missing out on the Google payout and losing the right to install the Play Store) might affect that manufacturer's business.

The EU's decision would bring the running total of Google fines to about €6.7 billion after last year's penalty over shopping-search services.

Even for a company as massive as Google, $5 billion isn't exactly pocket change; it represents about 40 percent of Google's net profit in 2017, according to the Wall Street Journal.

Denmark's Vestager ordered Google to "put an effective end to this conduct within 90 days or face penalty payments" of up to five percent of its average daily turnover.

In a statement, the European Commission alleged that Google violated the law in three ways: unlawfully tying its search and browser apps to the Android operating system, paying manufacturers to pre-install Google Search on devices, and making it hard for device manufacturers to sell "forked" versions of Android, such as versions running Amazon's Fire OS.

Democratic Sen. Richard Blumenthal of CT tweeted that the fine should "be a wake-up call" to the Federal Trade Commission and "should lead U.S. enforcers to protect consumers". The penalty is said to be nearly double the previous record of 2.4 billion euros which Google was ordered to pay past year over a similar case for its online shopping search service. While Vestager acknowledged that Google does not prevent users from downloading, installing and using other browsers or search apps, she claimed that only 1% of the users downloaded a competing search app and 10% used a different browser. Additionally, the latter paid a huge sum of money to OEMs and network operators to ensure they installed Google Search as the exclusive search app on their devices.

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