Google Handed Record $5 Billion EU Fine Over Android OEM Restrictions

Google keeps breaking unwanted records in Europe. The company has been in a constant cycle of investigation for breaking several European Union laws. Antitrust investigations around the company have resulted in massive fines in the past. Today, the European Commission has hit Google with a record-breaking fine of €4.34 billion ($5.04 billion). Yes, the fine is massive and the record-breaking part is important. Not least because Google is the current record holder of the highest fine paid to the Commission. A year ago, the company was forced to pay $2.7 billion for breaching competition laws around its shopping search results. This time, the European Commission says the fine regards three restrictions Google placed on Android device OEMs. Under European laws the restrictions break antitrust regulations. Margrethe Vestager, European Commissioner for Competition, says the company is monopolizing search: “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.” Furthermore, Vestager says the imposed restrictions harm consumers by not giving them choice. Interestingly, the Commission points out dominating a specific market is not illegal under its laws. The problem with Google is the EC says the company is purposely harming competitors in three ways:

• Illegal tying of Google's search and browser apps
• Illegal payments conditional on exclusive pre-installation of Google Search
• Illegal obstruction of development and distribution of competing Android operating systems

Making OEMs comply with the restrictions has allowed the company to dominate “in the market for general internet search services, licensable smart mobile operating systems and app stores for the Android mobile operating system”.

EU Woes

While Google will likely protest this outcome, it is worth mentioning it is not just the EU concerned by the company. Former Microsoft CEO Steve Ballmer said in May that the company is “out of control”. He urged European authorities to act and clamp down on Google's practices. “I still believe that the … power of Google in Europe is out of control,” he said. “I think they should be regulated to permit competition. I thought that when I worked at Microsoft; I still believe it. Microsoft has backed off from that. That's new leadership's perspective. But I absolutely think there's a problem, and the Europeans were on to an appropriate form of regulation.” Yes, the company now facers a huge fine, but it is definitely a penalty Mountain View can ride… there's enough money in the bank. However, I have previously written how this fine could eventually lead to the EU taking more drastic action. For each fine Google takes, the EU is surely moving closer to breaking the company up.