Margrethe Vestager, European Commissioner in charge of competition policy.
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The European Commission fine will exceed last year’s then-record €2.4 billion penalty following an investigation into Google’s shopping-search service.
In order to pre-install Google’s apps – including the Play Store and Google Search – on their devices, manufacturers had to commit not to develop or sell even a single device running on an Android fork.
Google’s practices have denied rival search engines the possibility to compete on the merits.
In 2016, Vestager said: “A competitive mobile internet sector is increasingly important for consumers and businesses in Europe”.
“Today the commission has chose to fine Google 4.34 billion euros ($5 billion) for breaching European Union antitrust rules”, Vestager told a press conference in Brussels.
Android is the world’s most-used smartphone operating system and runs on about 80 percent of mobile devices worldwide. The punishment comes amid wider scrutiny over the power that tech giants like Google and Facebook wield over our lives. He also says that the rules imposed by Google are meant to “ensure technical compatibility”, and that they’re optional. It argues that if users see pre-installed browsers and search, they simply use those services to the detriment of all others.
The new $5 billion fine would undoubtedly force Google to revamp its strategy of delivering personalized search results since the whole paradigm is based on Google search and its entire app ecosystem. In its view, an European Union ruling will harm app developers and customers by undercutting Google’s business model of giving away Android software and generating revenue from mobile advertising. The EU Commission also dismissed Google’s argument that Apple was a competitor to Android devices, saying the iPhone maker does not sufficiently constrain Google because of its higher prices and switching costs for users.
The commission began investigating Android after a complaint was lodged by Fairsearch, a trade group that originally included Microsoft, Nokia and Oracle among its members.
Google said that instead of restricting competition, it did the opposite.
According to the EC, those measures prevent other companies from having a fair chance to compete with Google’s search engine and prevented other variations of the Android operating system to compete.
This fine is the EU’s largest punishment ever imposed on a tech firm.
Google’s own Play Store, which is used to distribute television shows, movies, applications, and ebooks, accounts for more than 90 per cent of all software downloaded on Android devices in Europe.
Pichai intends to appeal the fines.
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Alphabet shares were down 1.2 percent in pre-market trading in NY on Wednesday. The regulators are also aiming to control how Google conducts its business. They point to the Chrome browser being pre-installed in Android and Google Search turned on by default as potentially concerning.
