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European Commission imposes record fine on Google for anti-competitive practices

Wednesday, 18 July, 2018 - 17:35

The EU has imposed a fine of 4.34 billion euros on Google for abusing the dominant position of its smartphone operating system, Android, in order to establish the hegemony of its online search service. The European Commission told the American company “to put an end to its illegal practices within ninety days” or its parent company Alphabet will be hit with more fines.

The penalty imposed by the Commissioner for Competition, Margrethe Vestager, smashes the previous record, which was also held by Google. On June 27, 2017, the search engine was ordered to pay 2.42 billion euros for abusing its dominant position in online research by favouring its “Google Shopping” price comparison, to the detriment of competing services.

Google disputes the decision, which it is appealing to the EU Court of Justice based in Luxembourg.

The Android antitrust case – involving Google’s operating system found in 77 percent of smartphones in the world – has been in the crosshairs of Brussels for several years. In its 2016 complaint to Google, the European Commission accused the American company of obliging smartphone manufacturers to preinstall the “Google Search” tool and set it as the default or exclusive search service on the vast majority of Android devices sold in Europe.

In addition to Shopping and Android, the EU’s competition services have a third complaint against Google: its advertising practices. Europe has criticised it for having abused its dominant position with its advertising agency AdSense by artificially limiting the possibility for third-party websites to display contextual advertising from competitors. Here too, a fine could be set.

Google immediately responded by saying it will challenge the decision in court. “Android has created more choices for everyone, not less […]. We will appeal the Commission’s decision,” said a spokesman for Google. “The characteristics of effective competition are a dynamic ecosystem, speed of innovation and lower prices, which is the case today,” the spokesperson added.

 


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