Google hit with record € 4.34 bn EU fine over ‘illegal’ Android strategy

Google hit with record € 4.34 bn EU fine over ‘illegal’ Android strategy

Google hit with record € 4.34 bn EU fine over ‘illegal’ Android strategyThe new sanction would nearly double the previous record EU anti-trust fine of € 2.4 billion, which also targeted Google.

The EU said Wednesday it had slapped a record € 4.34-billion ($5.04 billion) antitrust fine on Google for illegally using its Android operating system to strengthen the dominance of its search engine.

“Google has used Android as a vehicle to cement the dominance of its search engine,” EU Competition Commissioner Margrethe Vestager said in a statement. “This is illegal under EU antitrust rules.”

The new sanction would nearly double the previous record EU anti-trust fine of € 2.4 billion, which also targeted Google, in that case for the Silicon Valley titan’s shopping comparison service in 2017.

The decision, which follows a three-year investigation, comes as fears of a transatlantic trade war mount due to President Donald Trump’s decision to impose tariffs on European steel and aluminium exports.

“The fine is based on the length of the infraction, but also on whether antitrust authorities believe there was an intention to commit the offence, and whether they excluded competitors or not,” said another European source.

Danish former minister Vestager, who has targeted a string of US tech titans, spoke by telephone with Google chief Sundar Pichai on Tuesday night to tell him about the decision in advance.

‘Financial incentives’

Vestager is expected to say that Google shut out rivals by forcing major phone makers including South Korea’s Samsung and China’s Huawei to pre-install its search engine and Google Chrome browser, thereby freezing out rivals.

They were also made to set Google Search as the default, as a condition of licensing some Google apps. Google Search and Chrome are as a result pre-installed on the “significant majority” of devices sold in the EU, the European Commission says.

An EU complaint formally lodged in April also accuses Google of preventing manufacturers from selling smartphones that run on rival operating systems based on the Android open source code.

Google also gave “financial incentives” to manufacturers and mobile network operators if they pre-installed Google Search on their devices, the commission said.

Under EU rules Google could have been fined up to 10 percent of parent company Alphabet’s annual revenue, which hit $110.9 billion in 2017.

Vestager’s campaign against Silicon Valley giants in her four years as the 28-nation European Union’s competition commissioner has won praise in Europe but angered Washington.

Brussels has repeatedly targeted Google over the past decade amid concerns about the Silicon Valley giant’s dominance of internet search across Europe, where it commands about 90 percent of the market.

As well as the Android and Google Shopping files, it also has a third investigation under way, into Google’s AdSense advert-placing business.

Silicon scalps

Vestager’s other major scalps include Amazon and Apple.

The EU ordered Apple in 2016 to pay Ireland € 13 billion in back taxes that the iconic maker of iPhones and iPads had avoided by a tax deal with Dublin.

It has also taken on Facebook over privacy issues after it admitted that millions of users may have had their data hijacked by British consultancy firm Cambridge Analytica, which was working for Trump’s 2016 election campaign.

But Brussels has had US tech giants in its sights for a decade in a half, since it imposed a huge € 497 million fine on Microsoft in 2004 for anti-competitive behaviour and ruled it must make changes to its Windows system.

The Google decision comes just one week before European Commission chief Jean-Claude Juncker is due to travel to the United States for crucial talks with Mr. Trump on the tariffs dispute and other issues.

Transatlantic tensions are also high over Mr. Trump’s berating NATO allies on defence spending at a summit last week, over his summit with Russian leader Vladimir Putin, and over the US president’s pull-out from the Iran nuclear agreement and Paris climate deal.

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