Google fined record US$5b by European Union over Android

Android on smartphone

The head of the U.S. Federal Trade Commission, which has investigated Alphabet's Google in the past for abuse of web dominance, said on Wednesday he would take a close look at Europe's recent decision to fine the company 4.34 billion euros ($5 billion).

The EU is also now investigating Google in another antitrust case relating to its AdSense service.

Google has used Android as a vehicle to cement its dominance as a search engine.

The European Commission stated two years ago that the need to have Google Play Store on Anroid phones denies rivals such as Microsoft's Bing search engine, the chance to strike deals with smartphone companies to have its search engine installed, an accusation that Google has denied. Commissioner Margrethe Vestager, in charge of competition policy, said: "Today, mobile internet makes up more than half of global internet traffic".

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Pichai asserts that the EC failed to consider that Android does have at least one major competitor in the mobile market: Apple's iOS.

Google said in a statement that it would appeal the EU's ruling. Apple also pre-installs a number of apps on its iPhone models, however. Also true. What he doesn't address is how not agreeing (and thereby missing out on the Google payout and losing the right to install the Play Store) might affect that manufacturer's business.

This was a foreseeable fine, as Microsoft, too, had been penalized by the European Union for bundling Internet Explorer with Windows, not once, but twice -in 2008 (€899 million / $1.04 billion) and 2013 (€561 million / $651 million).

A hot potato: The European Commission said Google must become compliant within 90 days or face penalty payments of up to five percent of the average daily worldwide turnover of parent company Alphabet.

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Although Google's appeal is likely to begin a game of table tennis between itself and the European Commission that will last years, this concludes the lengthy investigation into the Android operating system.

In a statement, the European Commission alleged that Google violated the law in three ways: unlawfully tying its search and browser apps to the Android operating system, paying manufacturers to pre-install Google Search on devices, and making it hard for device manufacturers to sell "forked" versions of Android, such as versions running Amazon's Fire OS. If Google stops offering its variety of mobile apps as a pre-installed suite, it is set to lose out on the prime real estate of the handheld device from where it makes more money by showing ads than those shown through third-party apps.

Google also prevented manufacturers from selling smartphones that run on rival operating systems based on the Android open source code, it said.

He also defends the company's app bundling, arguing it's easy for users to install alternatives if they don't want to use Google's pre-installed options. Google owner Alphabet Inc. and the commission both declined to comment on the Android fines.

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