Google hit with record $5 billion European Union antitrust fine


Google faced a record European Union fine Wednesday for using its Android smartphone system to illegally boost its search engine, in a ruling that risks a fresh clash between Brussels and Washington.

Margrethe Vestager, European commissioner for competition, said: 'Google has used Android as a vehicle to cement the dominance of its search engine. The penalty of 4.34 billion euros was a record, and far larger than the €2.4 billion, or about $2.8 billion, that the European Union levied on Google past year for unfairly favoring its own services in internet search results. Previously Ms Vestager accused Google of anti-competitive behavior and demanded that Android should not force OEMs to set Google as their default search engine and pre-install Chrome to have access to Google Play.

The EU penalty was expected to exceed the 2017 fine because of the broader scope of the Android case, sources has said.

In 2017, Vestager slapped the US -based tech giant with a $2.7 billion (4 billion NZD) fine for giving its shopping-comparison service prime real estate in search results over its rivals' competing offerings.

While the fine is a record, it represents just two weeks of Google's yearly revenue.

"Android has created more choice for everyone, not less", Google spokesman Al Verney said in an emailed statement.

Asked on whether breaking up Google would solve the issue, a call made by a number of Google foes, she said she was not sure if that was the solution.

Despite being a record fine, Alphabet generated about the same amount of money every 16 days in 2017, based on the company's reported annual revenue of $110.9 billion for the year. The ruling could alter how Android users work in Europe, by allowing manufacturers to sell phones without Google apps installed.

Google has already been targeted over similar violations in Russian Federation, where it was forced to make it easier for consumers to use rival search engines.

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This is not the first time Google faces problems in the EU.

Firstly, that Google has 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).

Smartphone makers are allegedly discouraged from releasing devices that are based on the Android open source code but not affiliated with the Google-owned property.

Google has built a massive business of banner and videos ads, thanks largely to its central role on Android devices.

This latest fine rests on the dominance of the Android OS, specifically the contracts with OEMs that ensure Google's own apps and services come preinstalled on Android smartphones.

Ms Vestager acknowledged that Google's version of Android does not prevent device owners downloading alternative web browsers or using other search engines.

Google Search and Chrome are as a result pre-installed on the "significant majority" of devices sold in the European Union, the commission says. Google makes around $30 billion in revenue per quarter right now and its parent company, Alphabet, turned over more than $100 billion previous year.

On Wednesday, Vestager told a news conference in Brussels she "very much" likes the United States.