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EU hit Google with €4.3bn Android fine

Posted on Jul 18, 2018.

The European commision have decided that Google’s Android platform has used its mobile operating system to illegally cement its dominant position in search.

For Google, this has resulted in a record fine of  €4.34bn (£3.9bn). Furthermore,  Alphabet the parent company of Google must change it’s business practices within 90 days or face penalties of up to 5% of its average global turnover.

The European commision believe this decision will change the marketplace and that manufacturers will start to sell devices using versions of the Android OS that are different to Google's such as the Amazon Fire OS.

One way that the European commision suggest that Google can change their practices is to follow the model implemented by Google in Russia following similar complaints by the country's regulator. This led Google to offer Android users a choice in default search engines on their first use of the Chrome browser.

The European Commision has stated the following three ways that Google have acted illegally.

Android manufacturers who wanted to offer access to Google’s Play app store must pre-install the Google Search and the Chrome browser as a condition of access.

Payments were made to large manufacturers who pre-installed the Google Search app on their devices.

Manufacturers were prevented from selling devices with alternative versions of Android installed.

Although it was possible for users to download alternative versions it was recognised that very few did so with less than 1% downloading a search alternative and less than 10% downloading a browser alternative.

This is not the first time a fine has been imposed on Google and follows fine after an investigation into its shopping comparison service. A separate investigation into Google AdSense is also underway.

Google Plan to appeal the decision.

Google's chief executive Sundar Pichai has responded in a blog post.

"Rapid innovation, wide choice, and falling prices are classic hallmarks of robust competition and Android has enabled all of them. Today's decision rejects the business model that supports Android, which has created more choice for everyone, not less."

Business Assessment

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