Today the European Commission has announced that it has found Google in breach of EU antitrust laws and has fined the company €4.34 billion.

The original proceedings against Google formally opened in April 2015, and investigated Google’s business practices related to Android licensing between 2011 and 2014. In their investigation the EU determined that Google was in violation of EU rules prohibiting anti-competitive agreements and abuse of dominant market positions.

As detailed in the thorough press-release, Google was found to have engaged in a trio of illegal practices:

  • 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);
     
  • made payments to certain large manufacturers and mobile network operators on condition that they exclusively pre-installed the Google Search app on their devices; and
     
  • has prevented manufacturers wishing to pre-install Google apps from selling even a single smart mobile device running on alternative versions of Android that were not approved by Google (so-called "Android forks").

Furthermore in the press release, the Commission correctly details Google’s business model for Android, as it describes that the operating system was created in order for Google to be a part of the crucial shift from desktop PCs towards mobile devices. And, in turn, to ensure that its flagship product, Google Search, would feature predominantly in the mobile space. The Commission determined that starting in 2011 Google became dominant in the market for app stores for Android, and thus its practice of forcing manufacturers to preinstall the Google Search app was found to be illegal.

The tying of the Google Chrome browser into the list of required pre-installed application from 2012 onwards was also found to be abusive of its dominant market position.

The commission argues that pre-installation creates a status quo bias for users, as whatever default applications are included with a device are the predominantly retained ones by users, creating a significant barrier to entry for competing alternatives. Google forcing manufacturers to pre-install these applications thus reduced the ability of rival application developers to compete.

The investigation also found that Google offered significant financial incentives to device manufacturers to exclusively pre-install only Google Search across that manufacturer's whole device portfolio. The investigation is said to have shown that rival search engine providers would have been unable to counter-compensate a manufacturer for the loss of revenue from Google while still generating a profit of their own. The Commission found that this particular conduct was gradually lessened in 2013 and ceased as of 2014.

Finally, one of the bigger findings is Google’s obstruction of the development and distribution of competing Android operating systems (forks). As Android is an open-source operating system, in theory any manufacturer could just fork it and continue to develop it independently as they would see fit. While in theory nothing stops a manufacturer from doing this, in practice Google’s strict CTS requirements mean that any such fork would not be supported by any Google services, and as such be shut out of the main Android application ecosystem. Of particular note is that a manufacturer would lose all rights to bundle Google apps across all of its devices if it were to sell any alternative device with a forked OS.

Google’s counterargument to this was that the restrictions were necessary in order to avoid fragmentation; the Commission however found that Google had made no effort in trying to determine if Android forks would be compliant with the technical requirements of its own proprietary applications. The Commission also said that Google had made no credible evidence available that could demonstrate any technical failures in forks that would cause them to be unable to support Google’s apps.

The €4.34bn fine takes into account the duration and gravity of the infringements, and is based on Google’s revenue from search and advertising in the European Economic Area. The Commission decision requires Google to end its illegal conduct within 90 days or else face further fines of up to 5% of daily average worldwide turnover of Alphabet (Google’s parent company).

Google for their part is refuting the commision's anti-competitive findings, and has stated that they intend to formally appeal the EU's ruling.

Source: European Commission Press Release

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  • HStewart - Wednesday, July 18, 2018 - link

    Is it ironic that after years of Google pestering Microsoft about browser on Windows - that Google gets part of their own medicine now. Reply
  • id4andrei - Wednesday, July 18, 2018 - link

    "Fate, it seems, is not without a sense of irony." - Morpheus Reply
  • peevee - Friday, July 20, 2018 - link

    I don't think Google did it. It was Netscape. Which was insanity too, given that by that time ALL OSes for PCs included browsers.
    Of course, EU bureaucrats were happy to steal money from an American company back then too.
    MAJOR retaliation is in order. I suggest fining BMW and Mercedes for their dirty tricks in diesel cars too (no, VW is NOT the only company which did/does that).
    Reply
  • Tams80 - Wednesday, July 25, 2018 - link

    American companies are among the worst for trampling over consumer rights. Warranties in the US are piss poor.

    I've no doubt there are those in power in the EU who wish to fine American companies for their money. There are also those who wish to put consumers on an even playing field with companies.
    Reply
  • PeachNCream - Wednesday, July 18, 2018 - link

    This is the best thing to ever happen to Alphabet and the EU deserves credit where due for acting to stop the slippery crap Google's been up to for years. Now maybe I can get my hands on a "clean" phone with a few less Google preinstalles crapware apps without having to load a custom rom or root and nuk system apps just to get a marginally functional device. Reply
  • Xex360 - Wednesday, July 18, 2018 - link

    Maybe we'll start to see phones with clean android installs. It's getting nearly impossible for me to get a new phone, most phones are notched, impossible to unlock the bootloader or root, manufacturers won't update their phones, while others are just bad phones. Reply
  • ZipSpeed - Wednesday, July 18, 2018 - link

    Yeah, this is why I decided to move to Apple. The ecosystem is gated, there's little room for customization and the entry price is high, but damn it, the software runs great on the hardware, no bloat & crapware (a lot of the Apple apps that come with the phone can be uninstalled), and it's very rare I experience a full crash where I have to do a hard reboot. Reply
  • FreckledTrout - Wednesday, July 18, 2018 - link

    Same here Zip. Personally that is all I want is the software to just work and perform well. I spend enough time tweaking things working in IT so having a phone that just works is much more important to me. So I stick to Apples hassle free walled garden. Reply
  • id4andrei - Wednesday, July 18, 2018 - link

    Yep. Nothing like years old hardware sold as new; or ergonomically and technically faulty keyboards; or touchbar gimmicks and dongle life. Let's not forget throttled devices to nudge you into upgrading. Everything is great and truly works in Apple land. Reply
  • ZipSpeed - Wednesday, July 18, 2018 - link

    Yeah, because everything is perfect in Google Land when the EU decides to handout a massive fine. Reply

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