Here are the 3 reasons Google was slapped with an enormous $5 billion fine by the EU
Trending News
BI Graphics
On Wednesday, the EU fined Google $5 billion.
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.
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.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.
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."Get the latest Google stock price here.
Copyright © 2021. Times Internet Limited. All rights reserved.For reprint rights. Times Syndication Service.
Next