Europe hits Google with €4.3bn Android antitrust fine: Witch hunt or fair sentence?
That’s a lot of dough! The European Commission has slapped Google with a record €4.3 billion fine over antitrust issues with Android phones. The tech giant has 90 days to put an end to its illegal conduct or face penalty payments of up to 5% of the average daily worldwide turnover of Google’s parent company, Alphabet.
Two years ago, the European Commission concluded that Google “abused its dominant position in a case concerning AdSense. One year later, they fined the tech giant €2.42 billion for “abusing its dominance as a search engine by giving an illegal advantage to Google’s own comparison shopping service.”
It seems that third time’s the charm for the European Commission; the EU’s politically independent executive arm has slapped Google with a record €4.3 billion fine over antitrust issues with Android phones. What’s more, the company has 90 days to put an end to its illegal conduct or face penalty payments of up to 5% of the average daily worldwide turnover of Google’s parent company, Alphabet.
Google receives record fine for allegedly abusing its Android dominance
If you’re wondering what Google did to deserve such a harsh financial punishment, have a look at the European Commission’s press release with regard to their decision. In short, Google
- 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”).
Google CEO Sundar Pichai reacted to the European Commission’s decision: “If phone makers and mobile network operators couldn’t include our apps on their wide range of devices, it would upset the balance of the Android ecosystem,” he wrote in a recent blog post.
We are concerned that today’s decision will upset the careful balance that we have struck with Android, and that it sends a troubling signal in favor of proprietary systems over open platforms.
He added that the European Commission’s decision “ignores the fact that Android phones compete with iOS phones, something that 89 percent of respondents to the Commission’s own market survey confirmed.” The EU’s politically independent executive arm did mention that “as a licensable operating system, Android is different from operating systems exclusively used by vertically integrated developers (like Apple iOS or Blackberry). Those are not part of the same market because they are not available for licence by third-party device manufacturers.”
However, they investigated the matter and found that the competition between Apple and Android devices “does not sufficiently constrain Google upstream” since Android device users have to learn a new operating system when they switch to Apple and the devices offered by the Cupertino-based company are usually more expensive than Android devices anyway, which might mean they are not accessible to a large part of the Android device user base.
According to the European Commission, Google has engaged in two instances of illegal tying:
- Tying of the Google Search app. This refers to the fact that the company has allegedly made sure its Google Search app is pre-installed on most of the Android devices sold in the EEA.
- Tying of the Google Chrome browser. The tech giant has allegedly made sure its mobile browser is pre-installed on most of the Android devices sold in the EEA.
You can find the press release with all the reasons that led to the European Commission’s decision here.
How about developers?
According to the Developers Alliance, the Android case can affect developers. “Our position is not altruistic, and we are not defending open source,” wrote Bruce Gustafson, President & CEO of the Developers Alliance in a recent blog post. A lot of developers use the Android platform to get their applications into consumers’ hands and the European Commission’s decision is likely to affect them financially.
If you think the decision is unjust, you can sign the Developers Alliance’s open letter to the European Commission to support Android and the digital ecosystem.
The openness of Android’s platform benefits developers. We hope the EC investigation will not undermine this ability for app developers to reach 2 billion users and not turn the mobile ecosystem into a multiple fragmented ecosystem.
Last but not least, we’d like to know how you feel about this situation.