European Union hits Google with record 4.3 billion euro fine over Android

European Union hits Google with record 4.3 billion euro fine over Android

European Union hits Google with record 4.3 billion euro fine over Android

The European Commission will fine Google a record US$5 billion on Wednesday over its Android mobile operating system, a source close to the matter told Reuters.

Google has a market share of more than 90 per cent for general internet search, licensed smart mobile operating systems and app stores for Android software, the European Union said in 2016.

The penalty is almost double the previous record of 2.4 billion euros which the US tech company was ordered to pay a year ago over its online shopping search service.

Google denied engaging in anti-competitive practices. More significantly, Google was given 90 days to stop what the European Union said were "illegal practices" on contracts with handset manufacturers that push Google services in front of users.

Amounting to around 40% of Google's net profit for 2017, the levy is certainly significant, but even more so is the fact that the company could be forced to change its business practices going forward.

In June 2017, regulators already fined Google 2.42 billion euros ($2.8 billion) for favoring its shopping listings in search results.

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While the fine is a record, it represents just two weeks of Google's yearly revenue.

The Android decision is the most important of a trio of antitrust cases against Google.

However, it has said it plans to appeal.

The EU's fine is the biggest ever imposed on a company for anticompetitive behavior.

In a statement at the time of the verdict, commissioner Margrethe Vestager said: 'Google has come up with many innovative products and services that have made a difference to our lives.

Despite Google being adamant it isn't doing anything wrong, it has already made some concessions in Russian Federation where the consumer watchdog laid down similar claims.

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The EU's competition office, which has earned a reputation under Ms Vestager for tackling American technology giants, also has an ongoing investigation into Google's advertising business AdSense.

Google is accused of forcing smartphone makers like Samsung and Huawei to preinstall its own services, such as Google Search and Google Maps, on Android.

An EU complaint formally lodged in April also accuses Google of preventing manufacturers from selling smartphones that run on rival operating systems based on the Android open source code.

Since then, Google has been fighting the case and it's now stuck in court. "Android has created more choice for everyone, not less".

"The Commission's fine of €4,342,865,000 takes account of the duration and gravity of the infringement", the EU Commission wrote.

The European Commission dismissed Google's arguments citing Apple as a competitor to Android devices, saying the iPhone maker does not sufficiently constrain Google because of its higher prices and switching costs for users.

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