Google hit with biggest antitrust fine in EU history

The EU Commission has imposed a €4.34 billion ($5.04bn) fine on Google for using its leverage on the Android operating system (O.S.) in order to “cement its dominant position in general internet search.” Alphabet, Google’s parent company, plans to appeal the ruling, claiming that “Android has created more competition, not less.” 

Smartphones are increasingly prevalent, so search engines rely more and more on mobile devices. Android is the world’s most used mobile O.S., according to some studies.

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The probe found that Google had used illegal “tying” methods. Phone and tablet manufacturers were forced to pre-install Google Search and Chrome in order to use Google Play, the app store for Android phones.

Google further made large payments to manufacturers and mobile network operators. In return, they pre-installed the Google search engine exclusively on new devices. While this does not prevent users from downloading other apps, the Commission found that only 1 percent of users downloaded a different search engine, and 10 percent installed a different browser.

The company has 90 days to halt these practices, or face further penalties of up to 5 percent of its daily turnover.

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Alphabet Inc., Google’s parent company exceeded analysts’ expectations in 2018. It recorded a profit of $9.4 billion (€8.1 billion) in the first quarter of 2018, compared to to $5.4 billion for the first quarter of 2017.

The penalty is a record for the Commission, almost double the size of the next biggest fine in the regulator’s history, which was also imposed on Google. In June 2017, the Commission fined Google €2.4 billion after an investigation into its shopping comparison service. “Google commits an abuse in the relevant markets for general search services in the EEA [European Economic Area] by positioning and displaying more favourably, in its general search results pages, its own comparison shopping service compared to competing comparison shopping services,” the decision read.

Google has contested the 2017 fine, claiming that the Commission “misstates the facts” and that the conduct in question is unlikely to have “anti-competitive effects.”

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