European Commission's verdict is out, $5 billion fine for Google

European Commission's verdict is out, $5 billion fine for Google
As we reported earlier this week, the European Commission released its decision on the case investigating Google for illegally limiting phone manufacturers' use of third party software on Android devices.

The Commission proved once again that it's not playing around when it comes to fines and ordered Google to pay a record high $5.04 billion for its unfair practices.

If Google doesn't make changes satisfying the regulator within 90 days, it can impose further fines that can reach 5% of Alphabet's (Google's parent company) daily turnover.

For the people left wondering how come Apple is allowed to highly restrict what is on their devices, the Commission explains that Apple doesn't license its software to other manufacturers. The conditions Google puts as part of the Android license agreement with phone makers is what the regulator considers illegal. More specifically:

  • Requiring manufacturers to pre-install Google Search and Chrome apps 
  • Paying manufacturers to only have Google Search pre-installed 
  • Not allowing manufacturers to sell phones with unapproved Android versions 

According to the EC, those measures prevent other companies from having a fair chance to compete with Google's search engine and prevented other variations of the Android operating system to compete. The press release gives as an example Amazon's "Fire OS" that manufacturers wanted to use, but decided not to, because they will lose access to Google's Play Store. This didn't allow European consumers to benefit from the competition between developers and denied them access to "further innovation".

Google issued a statement that it will be appeal the ruling, but it is unlikely that will lead to a change in decision. Instead, executives at the company should come up with a way to comply with the ruling while mitigating any potential damages to their ecosystem and profits.

source: European Commission via Reuters

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