Google Fined a Record $5 Billion by European Antitrust Officials

By Nick Vivarelli

LOS ANGELES (Variety.com) – The European Commission has fined Google a record $5 billion (€4.34 billion) for breaching antitrust rules, a decision the internet search giant immediately said it would appeal.

The fine stems from practices that the commission said were used “to cement its dominant position in general internet search,” according to a commission statement. The statement said Google required handset manufacturers to pre-install the Google Search app and its Chrome browser, limiting rival search engines, and also “made payments to certain large manufacturers and mobile network operators on condition that they exclusively pre-installed the Google Search app on their devices.”

The statement added that Google “prevented manufacturers wishing to pre-install Google apps from selling even a single smart mobile device running on alternative versions of Android.”

Google denied engaging in anti-competitive practices. “Android has created more choice for everyone, not less,” said Google spokesman Al Verney. “A vibrant ecosystem, rapid innovation and lower prices are classic hallmarks of robust competition. We will appeal the commission’s decision.”

The commission accused Google of plotting for years to maintain its stranglehold on the internet-search market. “Google obtains the vast majority of its revenues via its flagship product, the Google search engine,” Wednesday’s statement said. “The company understood early on that the shift from desktop PCs to mobile internet, which started in the mid-2000s, would be a fundamental change for Google Search. So, Google developed a strategy to anticipate the effects of this shift, and to make sure that users would continue to use Google Search also on their mobile devices.”

About 80% of smart mobile devices in Europe and worldwide run on Android, whose original developer Google bought in 2005, the commission said. Google must now bring its practices “effectively to an end within 90 days or face penalty payments of up to 5% of the average daily worldwide turnover of Alphabet, Google’s parent company.”

Margrethe Vestager, the EU’s competition commissioner, acknowledged during a news conference in Brussels that Google’s version of Android does not prevent device owners from downloading alternative web browsers or using other search engines. But she said only 1% of users downloaded a competing search app and 10% a different browser.

Google’s practices “have denied rivals the chance to innovate and compete on the merits,” Vestager said in the statement issued by the . “They have denied European consumers the benefits of effective competition in the important mobile sphere. This is illegal under EU antitrust rules.”

This is not the first time European authorities have slapped the internet-search giant with a massive antitrust fine. In June 2017, the European Commission said Google had to pay a €2.42 billion fine for favoring its shopping service in searches, in breach of antitrust rules. Google has appealed that fine as well, and a final ruling is still pending.