Google: EU commission announces record-high fine for abusing the Android monopoly
Google't company motto once was 'Don't be evil', but it apparently didn't stop Google from abusing its market position. At least in the eyes of the EU commission that is, as it announced today that it will fine Google a record sum of 4,3 billion Euro or 5 billion US-Dollars.
The EU commission or rather the commissioner Margrethe Vestager is responsible for the execution of EU wide anti-trust laws and it has decided that Google has abused its monopoly in the smartphone OS market to harm competition and strengthen its own grip on the search-market.
There is little doubt that Google has a monopoly in the market of Smartphone operating systems, as Android was pre-installed on 86 % of all Smartphones sold world-wide according to the market-research company Gartner. In some countries, Googles market-share is even higher.
A high-market share on its own is no criminal act, but abusing that monopoly is. Here are the three things that the EU commissions bases its decision on:
- The bundling of Android and Google's apps & services: This may remind some people about the time when the EU fined Microsoft for bundling the Internet Explorer with Windows. Google's practice is slightly different: Android is free for the manufacturers, but the Play Store, one of the key-components of the system, isn't. To be able to include the Play Store, phone manufacturers also have to include other Google services like Google Chrome, Google and Google Search, stifling competition in these areas.
- Payments to manufacturers and carriers: Google apparently directly payed larger manufacturers and carriers to include the Google Search app on their phones as the exclusive search app. This harmed competition in the search-app market as well as smaller phone-manufacturers, who didn't get any payments.
- Forcing the manufacturers to only use Google's version of Android: In principle, Android is open source, allowing anyone to fork it. In practice, Google's version absolutely dominates, because Google forces manufacturers to exclusively use this version if they want to sell any Smartphones with the Play Store. If a manufacturer wants to offer both Google's version on some phones and something like Amazon's FireOS on others, Google did not allow it.
The EU commission has been working on a case against Google for quite some time. In fact, there are multiple cases. Last year, Google was fined for abusing its position in the online-search market.
Google is not the first company that has to pay large fines for violating anti-trust laws. Other examples include Microsoft, which was fined multiple times in the mid 2000s for abusing its Windows-monopoly. Another example is Intel – Intel was fined in 2009 for trying to keep AMDs market-share low by paying PC-manufacturers and retailers to not include any AMD-equipped PCs in their lineups.
Google has announced that they will appeal this fine, so a lawsuit in this case is probably inevitable.