EU Commission slaps Google with €4.3bn fine

Written by Martin Banks on 18 July 2018 in News

The European Commission has imposed a record fine of €4.3bn on Google for abusing its dominant position in the market.

Photo credit: Press Association

The European Commission has imposed a record fine of €4.3bn on Google for abusing its dominant position in the market and forcing smartphone manufacturers which use its Android operating system to have Google apps pre-installed.

Google must now bring the conduct effectively to an end within 90 days or face penalty payments of up to five per cent of the average daily worldwide turnover of Alphabet, Google’s parent company.

It took three years for the Commission to deliver its largest ever anti-trust fine for a single company.

Last June, the Commission also fined Google €2.42bn for abusing its dominance as a search engine by giving an illegal advantage to Google’s own comparison shopping service. The Commission is currently actively monitoring Google’s compliance with that decision.

Reacting to the huge fine on Wednesday, Google's chief executive Sundar Pichai said the tech giant will appeal the decision.

He said, “Rapid innovation, wide choice, and falling prices are classic hallmarks of robust competition and Android has enabled all of them.

“Today’s decision rejects the business model that supports Android, which has created more choice for everyone, not less.

European competition Commissioner Margrethe Vestager said, “Today, mobile internet makes up more than half of global internet traffic. It has changed the lives of millions of Europeans.

“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.”

Further reaction to the move came from Molly Scott Cato, Greens/EFA MEP, who is a member of Parliament’s economic and monetary affairs committee.

“This record fine against one of the world’s tech giants shows that even the Googles of this world must play by the rules. EU competition standards are there for a reason, to stop the unfair advantage of large companies like Google, which can stifle innovation and opportunities for smaller rivals.”

She added, “This decision comes within the midst of the escalating trade conflict between the EU and the US, and demonstrates that the EU is committed to defending fair competition and rules-based trade. Only with the collective strength of the EU can we take on corporate giants such as Google.”

The Android case was triggered by a 2013 complaint by lobbying group FairSearch whose members at the time included competitors such as Oracle (ORCL.N), Nokia (NOKIA.HE) and Microsoft (MSFT.O).

The EU sanction comes in the midst of a trade conflict between the United States and the EU, which has hit back against US tariffs on European steel and aluminium by targeting $3.2bn in American exports with higher duties. European Commission President Jean-Claude Juncker will meet US President Donald Trump in Washington on the trade issue later this week.

About the author

Martin Banks is a senior reporter for the Parliament Magazine

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