Google was fined a mere $5 billion by the European Union and ordered to change the way it puts search and web browser apps on Android mobile devices in a global record for antitrust penalties,
Google’s terms for licensing according to the EU officials and its full-featured version of its Android OS, requires device makers to pre-install Google apps like Chrome, YouTube, Gmail, Google Maps, and the Play Store. This agreement violates antitrust laws and puts competing products at an unfair disadvantage, they stated.
But that small sum of money is literally nothing for the technological giant. Calculations show that is only just two weeks of revenue for Google’s parent Alphabet Inc and would barely dent its cash reserves of almost $140 billion. However, in the bigger picture, this could add to a brewing trade war between Brussels and Washington.
U.S. President Donald Trump already has remarked that this is evidence of “Europe’s unfair trade treatment of the U.S.”
“I told you so! The European Union just slapped a Five Billion Dollar fine on one of our great companies, Google,” Trump tweeted Thursday. “They truly have taken advantage of the U.S., but not for long!” Trump tweeted.
Google has been given 90 days to stop what the EU said were “illegal practices” on contracts with handset manufacturers that push Google services in front of consumers of Android phones.“Google has used Android as a vehicle to cement the dominance of its search engine,” EU Competition Commissioner Margrethe Vestager said in an emailed statement. “These practices have denied rivals the chance to innovate and compete on the merits.”
Google immediately responded by stating that the company would be challenging the ruling at the EU courts.
“Android has created more choice for everyone, not less. A vibrant ecosystem, rapid innovation and lower prices are classic hallmarks of robust competition,” a spokesperson for Google said.
Google has followed up and posted a blog from CEO Sundar Pichai titled, “Android has created more choice, not less.” In the blog post, Pichai argues that the ruling “ignores the fact that Android phones compete with iOS phones,” and “also misses just how much choice Android provides to thousands of phone makers and mobile network operators who build and sell Android devices.”
Pichai also stated that removing a pre-installed app is easy, and in the post provided a gif showing how easy it is, before Pichai concluded by saying that Google intends to appeal the decision.
The EU expressed that Google ensures its Google Search and Chrome browser are pre-installed on “practically all Android devices” sold in Europe. Users who find these apps on their phones are likely to stick with them and “do not download competing apps in numbers that can offset the significant commercial advantage derived on pre-installation.”
Google’s actions reduce the incentives for manufacturers to install and for users to seek out competing apps, the EU said.
The probe targeted Google’s contracts that require manufacturers of Android phones to take Google’s search and browser apps and other Google services when they want to license the Play app store, which officials stated is a “must-have” for new phones.
Essentially by Google arranging these deals, the EU is arguing that Google broke the law.
The EU also found illegal Google’s “significant financial incentives” to telecom operators and manufacturers that exclusively install Google search on its devices. Rivals of Google couldn’t compete with these payments, making it difficult for any other search engine to get their app pre-installed on manufacture phones. However, the EU said Google stopped doing this in 2014.
The EU further says Google’s history of paying large manufacturers to exclusively pre-install its apps is unlawful, and that these practices have made the marketplace less competitive.
Google’s contracts also prevented cell phone makers from selling phones using other versions of Android, the EU said. This hampered manufacturers from making devices using Amazon’s Fire OS Android version, it said.
This means Google will need to stop forcing cell phone manufacturers to preinstall Chrome and Google search and its other products in order to offer the Google Play Store on their handsets. Google will also need to stop preventing phone makers from using forked versions of Android, as the commission says Google “did not provide any credible evidence that Android forks would be affected by technical failures or fail to support apps.”
Although, that is arguably for security reasons and the EU might want to re-think that a little more thoroughly. It’s an absolute fact that Google has become a monopoly trying to serve consumers with every product it can think of by taking over several industries. With this ruling, maybe the Google monopoly train will be severley limited
Extracts By Aaron Kesel