Google has been slammed with a record $5 billion penalty by European authorities for abusing its dominance in the smartphone market, and “illegally” pushing its services to people who use Android-powered devices.
The tech giant has been ordered to diminish this practice, only for European regions for now, and has been given 90 days to change how it pre-installs apps into Android devices. Google’s operating system powers almost 80 percent of devices in the world and is the second most popular platform next to Apple’s iOS.
Accusations
According to EU authorities, Google has been including its search engine and browser by default in new Android devices, and this has “denied rivals the chance to innovate and compete on the merits.”
Other than that, the company has been accused of abusing its dominant platform to cement its secondary services, namely the search engine, by paying telecom companies and phone manufacturers to include Google Search in their handsets.
This causes Google to control most of the search queries and also pushes most of the user interaction with its system that lets it further improve its model. This also makes website operators index content based on Google’s algorithms to optimize their sites with its search engine, which further strengthens Google Search’s presence and harms competition.
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EU further said that Google makes sure to include Chrome and its search engine on “practically all Android devices”. If they work well, consumers stick with pre-installed apps and “do not download competing apps in numbers that can offset the significant commercial advantage derived on pre-installation.”
Ultimately, Google gets a bigger chunk of the market and rivaling services, such as Mozilla Firefox browser and DuckDuckGo search engine, don’t get a fair advantage.
Thirdly, the ruling also focused on Google’s practice of prohibiting its apps to run on alternative versions of Android, like Amazon’s Android-based Fire OS, that is not run by the company. Google almost immediately said that it would contest the ruling in court, and does not wish to remove these features from Android.
Google’s Statement
Sundar Pichai, Google’s CEO, says that his company’s business model has only provided more choice to Android users than in the “dial-up” age, and makes cutting-edge smartphones more affordable. He wrote in a blog post,
We’ve always agreed that with size comes responsibility. A healthy, thriving Android ecosystem is in everyone’s interest, and we’ve shown we’re willing to make changes. But we are concerned that today’s decision will upset the careful balance that we have struck with Android, and that it sends a troubling signal in favor of proprietary systems over open platforms.
According to him, pre-installing Search and Chrome in Android phones makes it easier for consumers who can start using basic functions on a new device without having to set things up.
Bad for Developers?
Google says that this ruling will prove harmful for developers who rely on the Android platform, that provides all the tools and pre-built environments to work and set up their businesses.
[The EU commission] misses just how much choice Android provides to thousands of phone makers and mobile network operators who build and sell Android devices; to millions of app developers around the world who have built their businesses with Android; and billions of consumers who can now afford and use cutting-edge Android smartphones.
The company’s operating system is open-source, meaning it can be used and modified by manufacturers for free and is able to sustain itself from revenue generated mainly from advertisement. If they were to change things, this would increase smartphone prices for the consumers, Google says.
The $5 billion fine is the highest ever imposed to a tech company by an antitrust authority. However, this penalty is still “relatively minuscule” for a company as big as Google, though it will be required to pay 5% of its revenue every day if it fails to comply with EU’s conditions by October.
Google is nowadays a pure Evil.