Android might not stay free thanks to massive fine

The European Commission fine will exceed last year's then-record €2.4 billion penalty following an investigation into Google's shopping-search service.

The EC also said that Google invested in Android because it anticipated users' shift from the desktop to mobile devices, so it planned all along to use Android's dominance to protect its search business as that shift happened.

The Commission said that Google broke the law by requiring manufacturers to install its Google Search and Chrome apps as a condition for licensing Google's app store.

Google's practices have denied rival search engines the possibility to compete on the merits.

The Android decision is the most important of a trio of antitrust cases against Google.

Vestager spoke by telephone with Google chief Sundar Pichai on Tuesday night to tell him about the decision in advance, a source close to the matter said.

European Union competition commissioner Margrethe Vestager has previously fined Google €2.4bn in a separate investigation into the firm's shopping comparison service, when the bloc ordered Google to stop abusing its search engine to favour its own product-advertising service other others.

But the impact of the EU's decision to fine Google over Android dominance could be more than just monetary.

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.

The EU says this gives Google an unfair advantage over competitors, which is reminiscent of the Internet Explorer dispute with Microsoft more than a decade ago.

The EU says that Google now has 90 days to stop these practices or risk facing penalty payments of up to 5% of the average daily worldwide turnover of Alphabet -Google's parent company. "A vibrant ecosystem, rapid innovation and lower prices are classic hallmarks of robust competition". The regulators are also aiming to control how Google conducts its business. "In accordance with the Commission's 2006 Guidelines on fines (see press release and MEMO), the fine has been calculated on the basis of the value of Google's revenue from search advertising services on Android devices in the EEA". That's because they prevented other mobile browsers from competing effectively with the pre-installed Google Chrome browser.

This is not the first time Google has been slapped with an enormous fine raging in billions. The EU is also going after Google's payments to its carrier and Android vendors partners who install Google Search on devices. That would be equivalent to roughly $300 million per day based on 2017's totals, so if the appeal fails, Google will need to pay up or face the possibility of serious damage to its bottom line. This means that people are far more likely to use search apps and browsers already present on their devices, and are unlikely to download competing apps. "We intend to appeal", Pichai said in a blog post.

Vestager said her decision wouldn't prevent Google from monetizing the Android operating system and recoup the investments it has made.

  • Wendy Palmer