Yahoo Finance EU fines Google record £3.9bn for illegal Android deals
The European Union has fined Google a record €4.34bn (£3.9bn) for breaking competition laws with its Android smartphone system.
EU competition commissioner Margrethe Vestager announced the fine in Brussels on Wednesday, after finalising the penalty on Tuesday night. The ruling could alter how Android users work in Europe, by allowing manufacturers to sell phones without Google apps installed.
The fine is a record for breaking EU antitrust law, almost doubling the €2.4bn Google was fined a year ago in a separate case, although it is much lower than the maximum €9.5bn the commission has the power to impose.
Ms Vestager has been investigating Google for three years over complaints the company illegally forces smartphone manufacturers to install its apps.
The company gives its Android software to phone manufacturers for free, but binds them to “exclusivity agreements” that force them to install Google’s web browser and search engine if they use the Google Play app store.
Fine of €4,34 bn to @Google for 3 types of illegal restrictions on the use of Android. In this way it has cemented the dominance of its search engine. Denying rivals a chance to innovate and compete on the merits. It’s illegal under EU antitrust rules. @Google now has to stop it
— Margrethe Vestager (@vestager) July 18, 2018
On Wednesday, as well as the fine, Google was given 90 days to cease these agreements. If it fails to do so, it faces a fine of 5pc of its daily revenue.
"These practices have denied rivals the chance to innovate and compete on the merits. They have denied European consumers the benefits of effective competition in the important mobile sphere. This is illegal under EU antitrust rules," Ms Vestager said.
Google said the decision had improved choice for consumers, and pledged to appeal the decision. "Android has created more choice for everyone, not less. A vibrant ecosystem, rapid innovation and lower prices are classic hallmarks of robust competition. We will appeal the commission’s decision," it said.
The commission said Google's deals constitute abuse of Android’s 80pc share of the European smartphone market and harms rival search engines and browsers. Google insists the agreements allow Android to remain free to manufacturers and help them compete against Apple.
The fine is the latest in a string of heavy financial impositions Ms Vestager has made on Silicon Valley companies. Google was fined €2.4bn last year for promoting its shopping service in search results, while Ireland has been ordered to recoup €13bn in unpaid taxes from Apple and Facebook was fined €110m for misleading regulators over its acquisition of WhatsApp.
Google being ordered to break its exclusivity agreements with smartphone manufacturers that use Android could lead the likes of Samsung to strike deals with other companies to install their own software, or to alter how the Android software runs.
Although a record fine, the sum is less than the profit Google's parent company Alphabet made in the first three months of 2018 alone.
