The European Union (EU) imposed a $5 billion penalty on multinational technology firm Google last week, alleging the company broke antitrust laws.
Following an eight-year probe into Google’s Android operating system, the EU found the firm placed illicit burdens on device manufacturers using its technology to increase the tech giant’s control over internet search.
In a statement announcing the fine, European Commissioner for Competition Margrethe Vestager said:
“Our case is about three types of restrictions that Google has imposed on Android device manufacturers and network operators to ensure that traffic on Android devices goes to the Google search engine. In this way, Google has used Android as a vehicle to cement the dominance of its search engine. These practices have denied rivals the chance to innovate and compete on the merits. They have denied European consumers the benefits of effective competition in the important mobile sphere.”
The second time the EU has penalized Google for allegedly abusing its market share. Wednesday’s accusations leveled against the firm include requiring manufacturers to pre-install Google Search and Chrome browser as requirement for licensing its Play Store app.
Similarly, the EU contends Google illegally made payments to larger manufacturers and mobile network operators with the demand they pre-installed Google apps on devices.
In a final charge, the EU claims Google forbade manufacturers from selling unapproved versions of Android.
Given 90 days to halt its behavior, the company responded to the EU immediately, forcefully defending its business practices and announcing its intent to appeal the EU’s decision.
In a blog post vigorously defending the firm, CEO Sundar Pichai proudly declared Android has spawned 24,000 devices at varying prices across 1,300 brands.
“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,” Pichai wrote.
Responding to President Trump’s criticism that “Europe is going after American companies,” potential 2020 White House contender Elizabeth Warren told CNBC she supports the EU’s decision, as U.S. antitrust laws are “lagging.”
The decision follows several stiff fines the EU has imposed on U.S. technology firms. In 2017, the commission slapped Google with a $2.7 billion fine for alleged favoritism in online shopping searches. In 2016, the EU demanded member state Ireland reclaim over $15.3 billion in taxes from Apple.
[The Verge] [CNBC] [Photo courtesy The Indian Express]