Google slapped with massive Android fine

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18 July 2018 | 0

The European Commission has fined Google, makers of the open source Android mobile operating system (OS), €4.34 billion for antitrust activities.

The commission said that Google broke EU antitrust rules as it “imposed illegal restrictions on Android device manufacturers and mobile network operators to cement its dominant position in general internet search”.

Google, despite allowing vendors and operators the ability to customise Android code for their implementations (so-called Android ‘forks’), insisted that device manufacturers who wished to obtain its proprietary Android apps and services must enter into contracts with Google, “as part of which Google imposes a number of restrictions. Google also entered into contracts and applied some of these restrictions to certain large mobile network operators, who can also determine which apps and services are installed on devices sold to end users.”

“Today, mobile internet makes up more than half of global internet traffic. It has changed the lives of millions of Europeans,” said Margrethe Vestager, European Commissioner for Competition. “Our case is about three types of restrictions that Google has imposed on Android device manufacturers and network operators to ensure that traffic on Android devices goes to the Google search engine. In this way, 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. This is illegal under EU antitrust rules.”

The commission said that Google has:

  • “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);
  • made payments to certain large manufacturers and mobile network operators on condition that they exclusively pre-installed the Google Search app on their devices; and
  • has prevented manufacturers wishing to pre-install Google apps from selling even a single smart mobile device running on alternative versions of Android that were not approved by Google (so-called “Android forks”).”

While the commission acknowledges that “market dominance is, as such, not illegal under EU antitrust rules”, it argues that “dominant companies have a special responsibility not to abuse their powerful market position by restricting competition, either in the market where they are dominant or in separate markets.”

Google has engaged in three separate types of practices, the commission states, “which all had the aim of cementing Google’s dominant position in general internet search.” These are illegal tying of Google’s search and browser apps, illegal payments conditional on exclusive pre-installation of Google Search, and illegal obstruction of development and distribution of competing Android operating systems.

The commission states that the results of these actions have been to deny rival search engines the possibility to compete on the merit, as well as preventing them “from collecting more data from smart mobile devices, including search and mobile location data, which helped Google to cement its dominance as a search engine.” The commission said the practices “harmed competition and further innovation in the wider mobile space, beyond just internet search.

“That’s because they prevented other mobile browsers from competing effectively with the pre-installed Google Chrome browser. Finally, Google obstructed the development of Android forks, which could have provided a platform also for other app developers to thrive.”

This has resulted in the levying of a fine of €4,342,865,000, which the commission says takes account the “duration and gravity of the infringement”, but which, it insists, is in accordance with 2006 guidelines on fines. It goes on to say that the fine has been calculated “on the basis of the value of Google’s revenue from search advertising services on Android devices in the EEA”.

The commission decision requires Google “to bring its illegal conduct to an end in an effective manner within 90 days of the decision.”

Google has signalled its intention to appeal the decision.

 

 

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