Android: EU slaps Google With $5 billion fine

On Wednesday, the European Union imposed a fine of $5billion on Google, this time in the antitrust file Android, a decision that may further deteriorate its relations with the United States and against which the firm will do call.

This financial penalty, intended to punish the US company for abusing the dominant position of its Android operating system for smartphones, to establish the supremacy of its online search service, pulverizes the previous record, already owned by Google.

“Google has used illegal practices to cement its dominant position in Internet research,” EU Competition Commissioner Margrethe Vestager told a news conference in Brussels.

“Google’s search engine is its flagship product. Every year, Google generates more than $95 billion in revenue from ads shown and clicked by Google Search users, and much of its revenue comes from the rise of mobile devices like smartphones and tablets. ” added the Danish commissioner.

The company was already condemned by the European Commission on June 27, 2017, to pay a record fine of $3.7 billion for abusing its dominant position in online research by promoting its Google Shopping price comparison. At the expense of competing services.

The amount of the fine is decided at the last moment and can reach theoretically, according to the rules of the European competition, up to 10% of the total turnover of the company which rose for Alphabet, parent company of Google , at $ 110.9 billion in 2017 ($ 145 billion Canadian).

The European Commission also urged the US company “to end its illegal practices within 90 days, on pain of fines of up to 5% of Alphabet’s global average daily turnover.”

“Google will appeal the decision of the European executive,” said a spokesman for Google, Al Verney, in a statement.

Tensions between the EU and the United States

This new sanction against the American giant comes in a particularly tense context between the European Union and the United States , with whom the friction topics are not lacking, as on NATO or trade.

Next Wednesday, in a week to the day, the President of the European Commission, Jean-Claude Juncker, must also go to Washington to try to defuse the trade dispute between the EU and US President Donald Trump, ready to tax imports of European cars into his country.

A hot folder for a long time

The Android antitrust file – operating system used for 80% of devices in Europe and worldwide, which is the equivalent of the iOS for the Apple iPhone – has been in the European Commission’s sights for several years .

In its statement, the European Commission detailed its complaints against Google. First, the California group has required manufacturers to pre-install the Google Search app and browser (Chrome) as a condition of licensing the online store (Play Store).

Second, it has paid some major manufacturers and some major mobile network operators to pre-install the Google Search app exclusively on their devices.

And third, it prevented manufacturers wishing to preinstall Google applications from selling even one smart mobile device running on other versions of Android not approved by Google.

In the antitrust case Shopping, Google had proposed remedies in September, still under review by the European Commission.

The Californian group also filed in September 2017 an appeal against the Brussels fine, before the Court of Justice of the European Union (CJEU), which should not fail to do in the Android folder.

Given the complexity of the cases, it would take about two years before a court decision.

Google and the ads in the sights of Europe

Besides Shopping and Android, the European Commission has a third fire on Google: its advertising practices.

Since July 14, 2016, it has accused it of abusing its dominant position with its advertising agency AdSense (80% of the European market) by artificially limiting the possibility for third-party websites to display contextual advertising from competitors. Here too, a fine could be set.

The first company in Silicon Valley to get a huge fine in an antitrust case from the European Commission is Microsoft.

In 2004, the US computer group was fined $ 764 million for refusing to provide complete technical documentation to its competitors so that they could design software fully compatible with the Windows operating system.

As our second lead editor, Brit Martinez provides guidance on the stories The Marketing Folks’ reporters cover. She has been instrumental in making sure the content on the site is clear and relevant to the readers. Brit received a BA and and MA from University of Alaska Anchorage.