Margrethe Vestager – Photo © European Union 2018
(BRUSSELS) – The EU Commission fined Google EUR 4.34 billion Wednesday for using Android to cement its dominance of internet search by imposing restrictions on Android device manufacturers and mobile operators.
Google now has end its practices within 90 days or face penalty payments of up to 5 prer cent of the average daily worldwide turnover of Alphabet, Google’s parent company.
“Mobile internet makes up more than half of global internet traffic. It has changed the lives of millions of Europeans.” said the EU’s Competition Commissioner Margrethe Vestager: “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.
“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” said Ms Vestager.
Specifically, the Commission says that 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”).
The Commission says the effect of Google’s practices are that they have denied rival search engines the possibility to compete on the merits. The tying practices ensured the pre-installation of Google’s search engine and browser on practically all Google Android devices and the exclusivity payments strongly reduced the incentive to pre-install competing search engines.
Google also obstructed the development of Android forks, the Commission contends, which could have provided a platform for rival search engines to gain traffic. It says Google’s strategy has also prevented rival search engines from collecting more data from smart mobile devices, including search and mobile location data, which helped Google to cement its dominance as a search engine.
The Commission says Google’s practices also “harmed competition and further innovation in the wider mobile space”, beyond just internet search. This is because they prevented other mobile browsers from competing effectively with the pre-installed Google Chrome browser. Finally, Google obstructed the development of Android forks, which could have provided a platform also for other app developers to thrive.
At a minimum, the EU executive says Google has to stop and to not re-engage in any of the three types of practices. The decision also requires Google to refrain from any measure that has the same or an equivalent object or effect as these practices.
The Commission stresses that its decision does not prevent Google from putting in place “a reasonable, fair and objective system to ensure the correct functioning of Android devices using Google proprietary apps and services, without however affecting device manufacturers’ freedom to produce devices based on Android forks”.
In other cases against Google, the Commission in June 2017 fined Google EUR 2.42 billion for abusing its dominance as a search engine by giving an illegal advantage to Google’s own comparison shopping service. The Commission is currently actively monitoring Google’s compliance with that decision.
Brussels also continues to investigate restrictions it says Google placed on the ability of certain third party websites to display search advertisements from Google’s competitors (the AdSense case). In July 2016, the Commission came to the preliminary conclusion that Google has abused its dominant position in a case concerning AdSense.
