Google faces $5 bn fine in EU related to Android dominance

Internet search engine Google is set to be fined a whopping Euro 4.3 billion or $4.99 billion by the EU as part of a major investigation into the US-based technology company.
Google Android dominance
The fine is related to Google’s abuse of its Android mobile phone software to get a leg-up over rivals, Reuters reports.

The record fine will be officially handed down to Google by mid-day on Wednesday.

It would be the biggest fine ever imposed by EU for an antitrust penalty – beating last year’s Euro 2.3 billion fine (also against Google).

The penalty is unlikely to hurt Google too much, given that the company is worth around £645 billion right now. And the company pulled in £24 billion in the first three months of this year alone.

The penalty from the European Commission is the highest ever imposed on a company for breaching EU rules and comes just over a year after the EU enforcer handed down a 2.4 billion euro fine to Google for favoring its shopping service over rivals.

EU antitrust chief Margrethe Vestager said EU also ordered Google to halt anti-competitive practices in contractual deals with smartphone makers and telecoms providers within 90 days or face additional penalties of up to 5 percent of parent Alphabet’s average daily worldwide turnover.

“Google has used Android as a vehicle to cement the dominance of its search engine. 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,” Vestager said.

The fine represents just over two weeks of revenue for Google parent Alphabet and would not dent its cash reserves of $102.9 billion.

Google said it would appeal the fine.

“We are concerned that today’s decision will upset the careful balance that we have struck with Android, and that it sends a troubling signal in favor of proprietary systems over open platforms,” Google CEO Sundar Pichai said in a blog.

The EU dismissed Google’s argument of competition from Apple, saying the US-based iPhone maker was not a sufficient constraint because of its higher prices and switching costs for users. Android runs about 80 percent of the world’s smartphones according to market research firm Strategy Analytics.

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