Google has been hit with a record €4.34 billion ($5 billion) for breaching EU antitrust rules.
The European Commission ruled that since 2011, Google has unfairly linked the Android mobile phone operating system to Google Search, and prevented mobile manufacturers from using alternative versions of Android.
The Commission said that Google has imposed illegal restrictions on Android device manufacturers and mobile network operators to cement its dominant position in general internet search.
Google must now bring the conduct effectively to an end within 90 days or face penalty payments of up to 5% of the average daily worldwide turnover of Alphabet, Google's parent company.
Commissioner Margrethe Vestager, in charge of competition policy, 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.”
The Commission found that Google 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’).
The EC said that Google’s strategy was intended to ensure that Google Search - the company’s main source of revenue – continued to be used as people shifted from PCs to mobile devices. The Commission said that Android today accounts for around 80% of smart mobile devices in Europe and worldwide,
The Commission decision concludes that Google is dominant in the markets for general internet search services, licensable smart mobile operating systems and app stores for the Android mobile operating system. Therefore, the company is in breach of anti-trust rules.
Google said it would appeal the decision, and also claimed that Android has increased competition among smartphone makers, lowering the prices for consumers. The company also says the allegation that it stymied competing apps is false because manufacturers typically install many rival apps on Android devices—and consumers can download others.