European Union hits Google with record fine

Google’s fine by the European Union over apps for Android mobile devices will set a record for antitrust penalties. ― Reuters pic

Google’s fine by the European Union over apps for Android mobile devices will set a record for antitrust penalties. ― Reuters pic

European antitrust regulators have fined Google with a 4.34 billion euro ($5.04 billion) fine for abusing its position in the smartphone market to increase the dominance of its search engine, the European Commission announced in a statement Wednesday. But in a 2016 investigation, the European Commission concluded that the way it went about that was illegal. The European Commission accuses Google of using its position in the market to impose unfair restrictions on OEMs and mobile operators to create a monopoly in the search market.

The EU fined Google $2.8 billion dollars in June of 2017 over how it its search engine provided shopping lists.

Regardless of what Pichai thinks, Google has 90 days make amends or it risks incurring further penalty charges - which could amount to up to 5 percent of Alphabet's daily turnover each day.

"From a debundling impact perspective on the business, we expect minimal impact as the consumer is likely to just simply download the apps for Google's services if and when they get new Android phones-much as they already do when they get new iPhones", Stephen Ju, a Credit Suisse analyst, wrote in a report.

"I very much like the United States. but the fact is that this (case) has nothing to do with how I feel", she said. The EU says Google is liable to face civil actions for damages that can be brought before the courts of the Member States by any person or business affected by its anti-competitive behavior. "We intend to appeal", Pichai said in a blog post.

Google's Android system, which Google lets device makers use for free, runs about 80 per cent of the world's smartphones, according to market research firm Strategy Analytics.

Another way in which Google broke European Union antitrust laws was by granting "significant financial incentives" to large device manufacturers and mobile network operators to exclusively ore-install Google Search in all Android devices.

According to the EU, Google's illegal behaviour dates back to 2011 and includes forcing manufacturers to pre-install Google Search and its Chrome browser together with its Google Play app store on their Android devices, paying them to pre-install only Google Search and blocking them from using rival Android systems.

"This is the next battleground for Google and the big tech players, but GDPR and the European Commission's focus on the tech giants is becoming a significant issue for them". Third: It prevented device makers from selling any smart devices powered by alternative "forked" versions of Android.

In addition, Google gave "financial incentives" to manufacturers and mobile network operators if they pre-installed Google Search on their devices, the commission said.

While Google has deep coffers of about $103bn and can easily afford the fine, the company said the punishment was unjustified.

Alphabet shares were down 1.2 percent in pre-market trading in NY on Wednesday.

The EU began investigating Google in regards to its Android OS practices after a complaint filed in 2013 by FairSearch, an organization made up of other tech companies such as Microsoft, Nokia, and Oracle.

Vestager's other major scalps include Amazon and Apple.

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