Here's Why Google Has to Pay a $5 Billion Android Antitrust Fine

EU hits Google with $5bn fine for breaking competition rules

Brussels has repeatedly targeted Google over the past decade

The crux of EU's case against Google was that it has shut out other rivals by forcing smartphone manufacturers to pre-install its search engine and Google Chrome browser on Android phones.

Though $5 billion is a lot of money for anyone, Google would no doubt recover quickly from the fine.

The EU's antitrust regulator began a probe into whether Google had abused dominance of the Android operating system to promote its own mobile apps and services including the company's search engine.

As this chart from Statista shows, Google clearly dominates a few European and United Kingdom consumer markets. Denying rivals a chance to innovate and compete on the merits.

Android is the most popular mobile software in the world.

Democratic Sen. Richard Blumenthal of CT tweeted that the fine should "be a wake-up call" to the Federal Trade Commission and "should lead United States enforcers to protect consumers". It's the highest anti-competition penalty ever imposed on a company by the EU.

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The EU has fined Google a record $5 billion for its illegal Android practices which violated the antitrust laws.

Google will be appealing the decision.

Android has an 80% market share among mobile operating systems and a 95% market share in "licenseable mobile operating systems", a market which doesn't include vertically integrated operating systems such as iOS or Blackberry OS because those can't be licensed by manufacturers. Second, Google has allegedly made payments to both larger manufacturers and network providers in return of them exclusively installing the Google Search app. Device makers are required to pre-install the Google's Search and Chrome apps in order to gain access to the Android app marketplace. "We intend to appeal", Pichai said.

Google chief executive Sundar Pichai said the Commission had overlooked the level of choice Android offered people. The ecosystem carries all the properties needed for a fair competition - "rapid innovation and lower prices". Regulators have also alleged that Google sought to prevent manufacturers from using alternatives to its Android operating system. In July 2016, the European Union put out a preliminary conclusion in this case that Google abused its dominant market position to put restrictions on the ability of websites to display search advertisements from Google's competitors.

The EU is concerned that Google's agreements with phone makers such as Huawei, Samsung and LG are putting those companies at a disadvantage since they're so completely dependent on Android.

Vestager, who has taken on a string of Silicon Valley titans as European Union antitrust chief, said that Google "must put an effective end to this conduct within 90 days or face penalty payments" of up to 5 percent of its average daily turnover. It said that "at a minimum", Google has to stop and to not re-engage in any of the three types of practices. The EU says that's still illegal, though. Vestager acknowledged that nothing was preventing users from moving to providers, however research showed just 10 percent of users installed a different browser and just 1 percent downloaded a competing search app.

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