EU Fines Google Record 4.3 Billion Euros Over Android

The European Commission has fined Google a record 4.3 billion euros (£3.83bn) for commercial practices related to its Android mobile operating system, the world’s highest ever antitrust penalty.

The EU’s executive arm also ordered Google to change the way search and browsing applications are placed on Android devices, giving the company 90 days to change contracts with handset makers that oblige them to give prominent place to Google’s own services.

“Google has used Android as a vehicle to cement the dominance of its search engine,” EU Competition Commissioner Margrethe Vestager said in a statement. “These practices have denied rivals the chance to innovate and compete on the merits.”

Advertising platform

The penalty, which follows a three-year  investigation, dwarfs last year’s  2.4bn euro European Commission fine related to Google’s online shopping search feature, and is the largest ever imposed on a company for breaking EU rules.

The record fine is nonetheless a small proportion of the $110.9bn (£85bn) in revenues reported by Google parent Alphabet for 2017.

Google’s Android software, including the Chrome browser and Google Search, is an essential part of its fast-growing mobile advertising business, which is expected to account for about one-third of all mobile advertising this year.

The Commission has alleged that Google forces device makers to include Chrome and Google Search if they place the Play Store app store on devices.

Fragmentation

It also says Google breaks competition laws by barring phone makers from selling official Android phones if they also sell devices that run customised versions of the software.

Google says the rules ensure Android remains a cohesive platform, and that changes could result in fragmentation that would make things more difficult for developers.

“Rapid innovation, wide choice, and falling prices are classic hallmarks of robust competition and Android has enabled all of them,” Google chief executive Sundar Pichai said in a blog post following the announcement. “Today’s decision rejects the business model that supports Android, which has created more choice for everyone, not less.”

Google can appeal the Commission’s decision, but would still need to comply with its terms while the appeal advances or risk additional daily penalties.

A third pending Commission case involves Google’s AdSense search advertising, but the Android case is considered the most important of the three.