Google faces $5 billion fine over Android

European Union Competition Commissioner Margrethe Vestager gives a joint press at the EU headquarters in Brussels

Google faces $5 billion fine over Android - report

A multi-year investigation of Alphabet's Google in the European Union has resulted in a record $5 billion (€4.34 billion) fine for the search giant.

Vestager is expected to say that Google shut out rivals by forcing major phone makers including South Korea's Samsung and China's Huawei to pre-install its search engine and Google Chrome browser, thereby freezing out rivals.

Google Search and Chrome are as a result pre-installed on the "significant majority" of devices sold in the European Union, the commission says.

The Commission said Google also made payments to some large manufacturers and mobile network operators on the condition that they exclusively pre-installed the Google Search app on their devices.

She further went on to state how these restrictions have denied consumers the opportunity to benefit from a healthy competition between the tech giant and its rival, deeming any such practices illegal. The company said it would appeal the commission's decision. There are more than two billion Android devices - including phones, tablets, and watches - being used around the world every month. Chief Executive Sundar Pichai was reportedly pre-briefed about today's decision on Tuesday and the tech titan is due to issue a public response today.

The EU previously fined Google €2.4B ($2.8B) over a separate investigation into its shopping comparison service.

But the impact of the EU's decision to fine Google over Android dominance could be more than just monetary.

The EU claims these practices have helped Google gain a dominant position in the mobile search market by making it near impossible for mobile search competitors to gain any foothold on Android devices.

Announcing the record fine, the EU's competition commissioner Margrethe Vestager said Google was in breach of competition law barring companies from exploiting their market dominance. The ecosystem carries all the properties needed for a fair competition - "rapid innovation and lower prices".

"Phone makers don't have to include our services; and they're also free to pre-install competing apps alongside ours. This reduced the ability of rivals to compete effectively with Google", the EC said.

Google is now appealing against that decision. In 2016, Vestager issued a statement of objections against Google and Android. Google's appeal of the shopping decision is pending.

This is one of the main abuses that the EC mentioned, because it prevents competition from other search services or browsers such as Firefox to gain significant market share on Android.

Regulators rejected arguments that Apple Inc. competes with Android, saying Apple's phone software can't be licensed by handset makers and that Apple phones are often priced outside many Android users' purchasing power.

About 80% of smart mobile devices in Europe and worldwide run on Android, whose original developer Google bought in 2005, the commission said.

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