Google was ordered to pay a $5.05 billion fine and stop forcing Android smartphone makers to install its search engine and browser on their phones. This decision was issued on Wednesday by the European Union’s antitrust authority.
The decision could pave the way for smartphone makers to offer more choice, with devices running different versions of Android, or offering alternative browsers or search engines out of the box.
The European Commission concluded that Google had abused its dominant position in the market in three ways: by linking access to the Play Store to the installation of Google Search and Google Chrome; paying phone makers and network carriers to exclusively install Google Search and preventing manufacturers from making devices running forks of Android.
Much of the appeal of today’s smartphones is the apps users can download and install on them, and Google Play has by far the widest range of apps of any mobile phone app store. .
It provides more than 95% of apps downloaded to Android phones, EU Commissioner Margrethe Vestager said, announcing the decision.
But Google won’t let smartphone makers install Play on their phones unless they also make its Chrome search engine and browser the default settings for their phones. Additionally, they should only use a Google-approved version of Android.
This has prevented companies like Amazon.com, which has developed a fork of Android it calls FireOS, from persuading major manufacturers to produce phones running its operating system or plug into its app store, said Vestager.
Less than 10% of Android phone users download an alternative to the pre-installed browser and less than 1% an alternative to the pre-configured search app. This makes it difficult for competitors to Google’s search engine and Chrome browser to compete on their merits, she said.
Vestager has given Google 90 days to end its illegal behavior or pay additional fines of 5% of its daily earnings for each day it fails to comply.
What does the Android antitrust ruling mean?
“At a minimum, Google should stop and not re-engage in the three types of restrictions described,” she said. “It can’t control which search engines, apps, or which Android operating system manufacturers can install.”
However, the company is free to decide how it will comply. Whether that involves righting past wrongs by alerting owners of existing Android phones that they can download an alternative browser or search engine, as Russia’s antitrust authority demanded in a similar case, is up to Google. to decide, Vestager said.
At a minimum, therefore, manufacturers should be free to sell Android phones later this year that offer different default search engines – perhaps ones like Qwant Where DuckDuckGo which promise to respect the privacy of their users – and come with another browser.
And maybe Amazon can persuade phone makers like ZTE or HTC that installing FireOS on their phones will change their fortunes.
Vestager dismissed concerns that Google would be forced to introduce licensing fees for Android, making the phones more expensive. The company makes enough money from its Play Store to more than cover its investment in developing the operating system, she said.
How big is Google’s Android antitrust fine?
The fine, although the largest antitrust sanction ever imposed by the EU, is almost a trivial matter for the company: it has already paid a large fine in another antitrust case related to price comparison research, and still has about $103 billion in cash or cash equivalents.
The Commission has the power to impose fines of up to 10% of their global revenue – $111 billion for Alphabet, Google’s parent company in 2017 – and this fine takes into account the duration and severity of the offence, Vestager said.
Copyright © 2018 IDG Communications, Inc.