Google Hit with Record $5B Fine by EU

Technology

Tech giant Google was hit with a record $5 billion fine by the European Union today for abusing its position as the world’s dominant mobile operating system provider. The Google Android operating system is by far the most widely used mobile OS in the world.

EU officials hit Google’s parent company, Alphabet, with 4.34 billion euros (roughly $5 billion) in fines.

Officials say Alphabet illegally favored its own products by forcing phone manufacturers to pre-install apps like Google Chrome and Google search on new devices. They also say Google violated anti-trust rules by paying phone manufacturers to exclusively install Google search on their phones, and prevented manufacturers from selling phones that run modified versions of Android.

Google was ordered to halt the practices within 90 days or face additional charges of up to 5% of Alphabet’s average daily worldwide revenue. Last year, the EU hit Google with a $2.7 billion penalty for favoring its shopping service over its competitors’.

“They have products that we all like and like to use. The only thing we don’t like is when they get to misuse their success and put in place illegal restrictions,” EU Commissioner for competition Margrethe Vestager told CNBC. “The thing that Google has to do now is, of course, to stop.”

Google rejected the EU’s findings.

“Today, because of Android, a typical phone comes preloaded with as many as 40 apps from multiple developers, not just the company you bought the phone from,” wrote Google CEO Sundar Pichai in a blog post after the decision was announced.

“If you prefer other apps—or browsers, or search engines—to the preloaded ones, you can easily disable or delete them, and choose other apps instead, including apps made by some of the 1.6 million Europeans who make a living as app developers.”

Pichai said he worries today’s decision sends a message that proprietary operating systems, such as Google’s main competitor’s Apple iOS, are being favored over open-source platforms like Android.

“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. We intend to appeal,” he wrote.

Photo by The European Commission

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