Google has been issued an unprecedented $5 billion USD or €4.3 billion fine by EU regulators. The massive fine is due to Google breaching anti-trust laws placed by the EU regulators, specifically in regards to its practices with the Android market, making it unfair for competing services to thrive on the popular, mobile platform.
European Commissioner Margrethe Vestager during a press conference earlier today, talked about how Google leveraged their own search engine while blocking third-party vendors from being allowed to distribute smart devices that did not ship with Google apps. Vestager, when talking about Google, stated, “….made payments to certain large manufacturers and mobile network operators on condition that they exclusively pre-installed the Google Search app on their devices.”
Vestager added that Google, “prevented manufacturers wishing to pre-install Google apps from selling even a single smart mobile device running on alternative versions of Android.”
The EU regulators have given Google a reasonable timeframe to bring their “illegal conduct to an end in an effective manner within 90 days of the decision.” Forcing Google to change its business practices by allowing manufacturers to choose wheater they want to preinstall Google apps, such as Chrome and Google Search on their devices, while still allowing access to the Google Play Store.
Additionally, Google will have to comply with manufacturers who wish to use forked or custom versions of Android, with the commission stating Google, “did not provide any credible evidence that Android forks would be affected by technical failures or fail to support apps.”
Google’s spokesperson AL Verney commented on the matter, “Android has created more choice for everyone, not less,” he then talked about the eclectic echo system and innovation offered by Google, “A vibrant ecosystem, rapid innovation and lower prices are classic hallmarks of robust competition. We will appeal the commission’s decision.”
Professor Mark Skilton of the Warick Business School gave his insight on the matter, “It looks like this time the fine will fit the ‘crime’ in this long-running dispute of market dominance and manipulation,” referring to monumental fine charged against Google.
Skilton went on to talk about Google and their business practices regarding third parties that utilize the Android platform, “Google has always been a contradiction, in that it is a market facilitator who also wants to control that market. Google claims that it has to compete with other big players and that swapping to an alternative search service is ‘one click away’, but in my view it is its locking up of around 80% of mobile devices with pre-installed Google Android software that is the issue.”
“It must be remembered Google ‘defines the market’ and is not just an innocent bystander,” Skilton added, referring to the vast reach Google has on the Android platform.
Skilton then referred to Google as a monopoly, stating “Google claims it is a free market for users, but that’s just not true in practice. Granted, as we see in the telecoms market, network operators want to protect their billion-dollar investment in the infrastructure that enables all this internet to work, but its when it becomes a monopolistic control from the supplier to the end user that it becomes a problem.”
“The internet is in urgent need of moving to its next level of evolution, which will be a more distributed and edge-based world. It is being seen with the rise of the internet of things that are multiplying the number of connections to smart homes, products, transport and everything else – this will bring a more open market, added Skilton, before closing with, “This is the next battleground for Google and the big tech players, but GDPR and the European Commission’s focus on the tech giants is becoming a significant issue for them.”
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