European Union regulators say Google has abused its dominant position in the smartphone operating system space to pressure phone makers into including Google Search and the Chrome web browser on their devices, stifling competition.

In response, the EU has fined Google 4.34 billion Euros (about $5.04 billion US) and ordered the company to end the conduct within 90 days or face further penalties.

Google plans to appeal the ruling.

At the core of the EU’s complaint is Google’s practice of working out deals with phone makers that allow them to install the Google Play Store only if they also load up their phones with other Google apps including Search and Chrome.

While Google releases Android as open source software, the Play Store and those other apps are not open source, which means that device makers cannot just pick and choose which they’d like to include… but shipping a phone without the Play Store would doom it to failure in most markets outside of China (where the Play Store is not available).

That hasn’t stopped Amazon from building its own Android-based Fire OS and shipping tablets and smart TVs powered by the operating system and featuring the company’s own app store. But even Amazon failed to make a dent in the smartphone market when the company tried shipping a Fire OS phone a few years ago.

Not only is Google said to have worked out deals that prevent mobile device makers from shipping phones and tablets with just the Play Store and no other proprietary Google apps… but the EU complaint says Google also prohibits companies who sell phones that meet Google’s requirements from also selling any other devices that ship with an Android fork that does not. So if Samsung, Motorola, HTC, or LG wanted to follow in Amazon’s footsteps and build their own version of Android complete with their own apps and services, they wouldn’t be allowed to continue shipping phones with the Play Store at all.

Google’s counterargument is that by making Android available for anyone to use for free… and by offering a set of Google apps that make it easy for any manufacturer to bring a phone to market without worrying too much about developing software in-house, the company has increased consumer choice rather than stifled it.

Of course, a big part of that equation is “free.” The only reason Google can afford to spend resources developing a mobile operating system that it gives away is because it expects to make money by driving users to its search engine and other tools that generate revenue through advertising and other means. The unwritten implication is that if Google has to allow phone makers to ship phones with a different default search engine, the company might have to start charging for its software which could have a major impact on the price of producing Android phones for device makers and the end price for consumers.

This is the latest in a line of major antitrust decisions from the EU commission, so it’s unclear how successful Google’s appeal will be. But I’m not surprised the company is trying.

The $5 billion fine, by the way, is the biggest ever. But as Reuters points out, it amounts to just about two weeks of revenue for Alphabet, Google’s parent company.

A bigger threat to Google’s bottom line may be the ongoing penalty if the company fails to change its behavior in the next three months: the EU will levy a penalty of “up to 5% of the average daily worldwide turnover of Alphabet.” While Google could probably even afford to swallow a 5% hit to its profits as the cost of doing business, I doubt that’s something Google officials really want to do.

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3 replies on “EU fines Google $5 billion for antitrust violations related to Android”

  1. Dislike Google’s spyware, as I do spyware built into most other modern technologies, OSes, websites, kiosks, etc… I often attack Google (and others) as a result. Still… I strongly disagree with the EU on this. Getting 3rd-party browsers, 3rd-party apps, installing alternate playstores is all relatively easy on Android. Google doesn’t even blink an eye on ROMs.

    You can’t say the same thing about their competitors – and they do have competition in this space. It’s simply that the competition is doing a half-*** job. One of the devices I “own” is an Amazon tablet and with their spyware, forced updates that include Alexa, Accessories… they even auto-download TV shows for local viewing that *they* want me to see – it’s far more troubling than what’s happening in google-space.

    If the EU was concerned about issues effecting the public, it should be looking at the lack of security updates and go after the individual companies. It should be looking at allowing root access to give users more control. It should look at ways for allowing easier installation of 3rd-party ROMs on all devices when so many non-google companies (including telcos) no longer meaningfully support devices soon after release.

    Google owns the Playstore and they invest tons of resources maintaining it. It’s their right to manage it how they see fit. There are politics at play here. There are anti-Google lobbying groups pushing for this. They are not addressing Apple which is as oppressive as any company can be (at least they do security updates!). They are not addressing Microsoft’s tactics in any meaningful way.

    As an end-user, EU’s demands do nothing to address the real issues. You end up with a gazillion companies doing an even worse job – they have already proven just how little they care about users – in a world with no accountability.

  2. A bit sad, considering Google is not the only one doing this.
    Google, M$, Apple, Xiaomi, even Meizu, Sony etc. etc. etc. are all pushing their sofware as a default … bloatware.
    Yet only MS and Google were fined.

    1. Pushing your own ecosystem is fine in order to compete on merit. However abusing your monopoly in one field, by leveraging that monopoly in order to create further monopolies, is when the government’s rightly step in. I fully agree with this decision.

      Google and Microsoft were targeted because they are the respective monopolies in their fields, MS for Desktop computing, and Google for Mobile and search.

      Google uses the popularity of their search and YouTube sites to push chrome browser on desktop by constantly nagging users. And they outright forced the inclusion of their search and browser on Android if OEMs wanted to use the Playstore, and services. Google was extremely manipulative in creating an Android Studio which develops apps that are dependant on Google’s location Services and other such APIs in order to be useful at all, then, it uses that momentum amongst devs who primarily support Playstore, in order to force search and browser on the phones as well, even though most OEMs only want the Playstore and location services.

      Android is open sourced in name only, an OS is only as good as the Apps that are developed for it, many of those apps, like a game that uses google’s location services for multiplayer, are completely dependant upon Google’s services, so everyone else was at an automatic disadvantage to begin with, only made worse by Google’s actions to further solidify the monopoly.

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