Google to appeal Europe's $5 billion fine

July 18, 2018 // By Peter Clarke
The European Commission has announced a fine of €4.34 billion (about $5.0 billion) against Google for illegal practices regarding Android's dominance of the mobile devices market and its use to strengthen the dominance of Google's search engine.

Google has given a riposte by way of a blog by its CEO Sundar Pichai that attempts to show that Google's offer of Android for free to phone makers in competition with Apple's iOS has created a more, rather than less competitive market. Pichai concludes by saying Google intends to appeal.

The European Commission's argument is that since 2011 Google has imposed restrictions on Android device makers and mobile network operators that support its dominance in general internet search. And because of Android's dominant position these restrictions are illegal the Commission argues. In particular, Google has required manufacturers to pre-install the Google Search app and browser app (Chrome), as a condition for licensing Google's app store (the Play Store) and made payments to some equipment manufacturers and mobile network operators on condition that they exclusively pre-installed the Google Search app on their devices.

"These practices have denied rivals the chance to innovate and compete on the merits. They have denied European consumers the benefits of effective competition in the important mobile sphere. This is illegal under EU antitrust rules," said Margrethe Vestager, European Commissioner for competition policy, in a statement.

The European Commission said Google has to stop its behaviour within 90 days or face penalty payments of up to 5 percent of the average daily worldwide turnover of Alphabet, Google's parent company. In 2017 Alphabet Inc. had a revenue of $110 billion and daily revenue of about $300 million, which would imply daily penalty payments of approximately $15 million.

The full European Commission press release could be found here. Google's blog could be found here.

Related links and articles:

Apple owes $14.5 billion back tax, says Europe

Europe proposes 3% tax on digital companies

EU takes China to WTO over technology transfer


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