Google domination at core of new antitrust fine

The European Union is poised to strike Google with a record-breaking $2.8 billion antitrust fine over its Android mobile operating system. Lucy Fielder reports.

BRUSSELS, BELGIUM / PARIS, FRANCE / CALIFORNIA, UNITED STATES (Reuters) – The European Union hits Google with a record-breaking $5 billion anti-trust fine.

That’s nearly double last year’s penalty over the Google shopping service.

This time it’s over its Android operating system for mobile phones, which regulators say is pushed on phone makers in a way that makes it too difficult for companies that aren’t Google to get their apps on it.

Think alternatives to Google Maps or the Google search engine, which often come pre-installed on the phones.

Along with the app marketplace called the Play Store.

The EU’s punishment only amounts to about two weeks’ revenue, but it faces more if it doesn’t change within 90 days.

Reuters’ European tech correspondent, Doug Busvine:

“In practical terms a fine of this order would represent an inconvenience, but not a threat, to Google’s business. Remember, last year’s fine worked out at 2.5 percent of parent company Alphabet’s annual revenues (…) Even if Google is forced to offer buyers of Android smartphones a choice of where they download their apps, many will simply go to its Play Store. That’s what they know and are used to.”

The Play Store and Google search engine are also big money makers through their ad revenue.

Google says it will appeal the fine. It argues that its hold on advertising keeps its software free for consumers and low cost for third party developers to work with.

And, that its chief competitor, Apple, uses a system that blocks rivals even more.

“Google will fight tooth and nail to defend its position in the Android app universe and in mobile advertising. (…) The dominance of the Silicon Valley platform companies is such that even billion-dollar fines and remedies may not be enough to move the needle. And yet they continue to grow rapidly. So the question as to whether they should be broken up will become more pressing.”

A recent study suggests that in Europe’s biggest countries, six out of the top ten most downloaded phone apps come from Google.

The other four are owned by Facebook.

Associated Links

  • Apple
  • Product Familia
  • Alphabet
  • Google
  • Facebook
  • Computing
  • Alphabet Inc.
  • Computer architecture
  • Android
  • Google
  • Mobile operating system
  • European Union vs. Google

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