Here are the 3 reasons Google was slapped with an enormous $5 billion fine by the EU
- Google has been fined an unprecedented €4.3 billion ($5 billion/£3.8 billion) by the EU Commission over three specific competition breaches.
- These included, requiring manufacturers to pre-install its browser and search apps in order to access Google's app store, Google Play.
- Paying manufacturers to exclusively pre-install Google's search app was the second breach, while the third was stopping manufacturers from running alternative versions of Android.
Google was fined a record €4.3 billion ($5 billion/£3.8 billion) on Wednesday by the EU's competition watchdog for using its dominant position in the marketplace to quash competition.
Margrethe Vestager, the European commissioner for competition, took issue with three specific trade practices, which it found to be illegal. Here they are in detail:
1. Requiring manufacturers pre-install its browser and search apps for access to the Google Play store
Google required phone manufacturers to pre-install Google Search and its browser app, Chrome, in order to access Google's app store, Google Play.
Speaking in Brussels, Vestager said pre-installation is an advantage that cannot be topped, as it creates a "status quo" bias. This means that people are far more likely to use search apps and browsers already present on their devices, and are unlikely to download competing apps.
To illustrate the point, the Commission said in 2016 more than 95% of all search queries on Android were made via Google Search, whereas more than 75% of search queries on Windows Mobile devices were made via Bing, the default Windows search engine.
During the investigation, device manufacturers told the Commission that the Google Play Store is a "must-have" app, which consumers expect to have pre-installed, especially since they cannot lawfully install it themselves.
"Google's practice has therefore reduced the incentives of manufacturers to pre-install competing search and browser apps, as well as the incentives of users to download such apps. This reduced the ability of rivals to compete effectively with Google," the Commission concluded.
2. Paying manufacturers to exclusively pre-install Google Search
Google made payments to certain (unspecified) large manufacturers and mobile network operators on condition that they exclusively pre-install the Google Search app on devices.
The Commission found that rival search engines would have been unable to match the financial incentive offered by Google.
Google started this practice in 2011, but began to slowly row back on it in 2013 after it became aware of the Commission's scrutiny.
3. Preventing manufacturers from selling devices running alternative versions of Android
Google blocked manufacturers from selling devices running any alternative versions of Android (otherwise known as "Android forks") not approved by the company.
In order to pre-install Google's apps — including the Play Store and Google Search — on their devices, manufacturers had to commit not to develop or sell even a single device running on an Android fork.
Vestager pointed out that Android forks are not a "remote possibility from a theory book," using Amazon's Fire OS as an example. The commission found that while manufacturers were interested in Amazon's operating system, Google's restrictions meant that it could only launch on Amazon devices.
Google argued that restrictions on Android forks were necessary to prevent "fragmentation" of the Android ecosystem, but the Commission assessed these arguments to be "not well-founded."
"These technical requirements cannot serve as a smokescreen to prevent the development of competing Android ecosystems. Google cannot have its cake and eat it," said Vestager.
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