Europe hits Google with a record $5 billion fine

Europe hits Google with a record $5 billion fine

European Union antitrust regulators levied a record €4.34 billion (S$6.9 billion) fine against Google on Wednesday (July 18) for illegal restrictions on Android smartphone makers and mobile network operators.

"Today the Commission has made a decision to fine Google €4.34 billion for breaching EU antitrust rules", EU Competition Commissioner Margrethe Vestager told a press conference in Brussels, adding "Google has engaged in illegal practices to cement its dominant market position in internet search".

Android, which runs about 80 percent of the world's smartphones according to market research firm Strategy Analytics, is the most important case out of a trio of antitrust cases against Google.

The 4.3 billion euro figure would set a new record for an antitrust fine, being the highest penalty since the 2.4 billion euros (~$2.7 billion) the EU Commision fined Google a year ago.

The EU's decision would bring the running total of Google fines to 6.7 billion after last year's penalty over shopping-search services.

Google has argued that its practices have not reduced consumer choice.

Recent reports said the new fine would break the previous record for the European Union region, which must have been bad news for Google given that the company was the holder of that dishonorable record.

This was amid complaints it gave the service a prominent position on the internet search engine, while rival services were demoted.

As well as the Android and Google Shopping files, it also has a third investigation under way, into Google's AdSense advert-placing business.

It represents just over two weeks of revenue for Google parent Alphabet Inc. and would scarcely dent its cash reserves of $102.9 billion.

EU competition chief Margrethe Vestager will hold a news conference later today, the European Commission said.

Those contracts might also prevent device makers from using other versions of Android on their devices.

"The fine is based on the length of the infraction, but also on whether antitrust authorities believe there was an intention to commit the offence, and whether they excluded competitors or not", said another source close to the matter. Crucially, by default all Android phones use Google as the default search engine and Google Chrome as the default web browser.

"The [EU] decision ignores the fact that Android phones compete with iOS phones", Google CEO Sundar Pichai writes in an op-ed piece on an official Google blog. The company also says the allegation that it stymied competing apps is false because manufacturers typically install many rival apps on Android devices-and consumers can download others.

The fine accounts for around 40% of Google's 2017 net profit of $12.62 billion.

Another aspect to the case relates to contractual restrictions that stopped manufacturers from selling phones with rival operating systems developed on Android open source code.