Google Just Fined $5 Billion for Abusing Android Dominance

European Competition Commissioner Margrethe Vestager addresses a news conference on Google in Brussels Belgium

European Competition Commissioner Margrethe Vestager addresses a news conference on Google in Brussels Belgium

The commission has concluded that through these contractual restrictions, the tech giant has been able to cement its dominance "in the market for general internet search services, licensable smart mobile operating systems and app stores for the Android mobile operating system".

"I think $5 billion is probably real money even to Google, but their core business is not threatened here", said Mark Patterson, a law professor at Fordham University who has written a book on antitrust issues.

The EC alleged that Google used Android's dominance in the European Union to further strengthen its lead in search, a practice that is illegal in the EU. The commission accused Google of using this to its advantage by requiring any manufacturer wanting to license the Google Play Store (the app store for Android smartphones) to pre-install Google Search and the Google Chrome browser. She continued to say Google has been "denying rivals a chance to innovate and compete on the merits".

The European Commission has finally decided the fate of Google following complaints of anti-competitive behaviour surrounding its Android platform.

A Google spokesman said that the company would comment on the decision later Wednesday. "We intend to appeal".

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This fine is the EU's largest punishment ever imposed on a tech firm.

With the decision, the European Union argues that Google behaved illegally by leveraging its market power to encourage handset makers to pre-install those apps and services on their devices.

Google also highlights that a typical Android smartphone comes with over 40 apps pre-installed from different developers. Today's "decision does not prevent Google from putting in place a reasonable, fair, and objective system to ensure the correct functioning of Android devices using Google proprietary apps and services, without however affecting device manufacturers' freedom to produce devices based on Android forks", the EC said. Google says it will appeal. There is also a third probe underway into Google's advert-placing business AdSense. It also accuses Google of preventing device OEMs from releasing and selling devices that ran a forked version of Android "not approved by Google".

"Google must now bring the conduct effectively to an end within 90 days or face penalty payments of up to 5 per cent of the average daily worldwide turnover of Alphabet, Google's parent company", the European Commission said in a statement. A vibrant ecosystem, rapid innovations and lower prices are classic hallmarks of robust competition. It said that "at a minimum", Google has to stop and to not re-engage in any of the three types of practices. It argues that if users see pre-installed browsers and search, they simply use those services to the detriment of all others.

Phones typically come preloaded with dozens of apps, not just Google apps, and it's easy to remove them and add new apps instead, Pichai writes.

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