European Union fines Google $5 billion for breaching competition rules

Ceria Alfonso
Julio 23, 2018

While Android operating system software is free, European Union authorities claim Google uses its leverage to get mobile device makers to install its other mobile apps like YouTube, Chrome, Gmail, Maps and Translate to cement its dominant position. "Now you wouldn't think of the European Union but they're a foe".

Android is technically an open-source operating system that Google lets cellphone makers use for free. It produces a full package and can not be accused of putting illegal pressure on manufacturers.

The European Commission slapped Google on Wednesday (18 July) with a record fine of €4.34 billion for abusing its dominant position and said it would continue to investigate as a "top priority" Google's other businesses for possible additional breaches of market rules.

The bundle contains 11 apps in all, including YouTube, Maps and Gmail, but regulators focused on three that had the largest market share: Google's Search and Chrome apps, and its Play Store app marketplace. Apart from Apple, no company has been able to develop an alternative to Android that competes with that dominance. Google owner Alphabet Inc. and the commission both declined to comment on the Android fines. However, Apple's iOS offers more advanced performance, privacy, and security, along with integration across Apple devices, Bloomberg noted. Google licenses its Android software to phone-makers for free. And having lots of apps and users attracts advertisers. The lazier users could just hit a button for installing all the apps recommended by the operating-system producer. Chrome, and not a Microsoft-developed program, is now the most popular browser on Windows. They deserve a boost from a universal preinstallation ban.

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More to the point, the decision conceives of competition too narrowly.

EU Competition Commissioner Margrethe Vestager said concerns about restricting competition "wasn't just a remote possibility from theory books". Google, which has 90 days to comply fully with the European Union order, which would entail abandoning the legal agreements tying the Play Store and Google apps to Android, has said it will appeal. The companies fight back with all their lobbying might, and appeal every ruling against them.

"Stop this behavior", Vestager told the firm. But it is really about access to highly personal data, and the very business model that underlies Google's enormous profitability. European companies are unlikely to become operating system leaders in the foreseeable future.

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