The Strategist

EU demands to impose a huge fine on Google

07/11/2018 - 16:02

The EU antitrust regulator has promised to impose a fine in the amount of several billion euro on Google. The watchdog believes that the search giant is promoting its services using the Android operating system, thereby abusing its dominant position in the market.

Nyshita talluri
Nyshita talluri
It is expected that the EU antitrust regulator will decide that Google, which is part of Alphabet Inc., has illegally abused prevalence of its Android mobile OS. The regulator may sentence the company to a fine of several billion euro and demand a change in business practices related to Android, reports Dow Jones, citing informed sources.

European Commissioner for Competition Margrethe Vestager is accusing Google in the fact that manufacturers have to pre-install Chrome and Google Search on their devices as their default browser and search engine. She believes that such actions are the reason for the company's domination in the system of search and provision of Internet services on the Android platform.

The European Union said that Google is forcing manufacturers to preinstall Google Search and the Chrome Internet browser on mobile devices, connecting them to their Google Play application store. Sometimes the company allegedly pays them for the exclusive preset of Google.

In addition, the EU said that Google violated competition rules by banning phone manufacturers from selling official versions of Android, if they also sell devices with unofficial versions of the OS. This decision can also lead to a change in these agreements.

Google claims that it has the right to impose such requirements to make it easier for developers to create applications that run on a number of phones on Android. As the company notes, if many companies begin to offer incompatible versions of Android, the entire system may be at risk.

Ultimately, this distorts fair competition and prevents mobile device owners from opting for other software products. This is the second time that the European Commission accuses Google of abusing its position.

Last year, the company was fined for a record $ 2.7 billion for dishonest competition and violation of the antitrust laws of the European Union. The company, as stated, changed the search results in favor of its own price comparison service. However, as sources added, this fine is unlikely to reach tens of billions of euros. The third investigation regarding the advertising service Google AdSense for Search is still ongoing.

It is not yet known what corrective actions Brussels will require. The EU may order the company to change the contracts that Google signs with companies that manufacture phones with Android OS. Also, the American corporation may be required to voluntarily allow users to choose the default browser and search system when they are first turned on. If Google does not, then it is obliged to take such a step with the help of law and fines.

According to some analysts, any decision that abolishes the current requirements of Google, which encourage manufacturers to pre-install Google applications on phones on Android, can put pressure on the company’s revenue.

A representative of Google declined to comment on the situation. In the past, Google rejected similar claims. The company, based in Mountain View (California), said that manufacturers pre-installed many competing services. In addition, it claims that Android has strengthened competition in the smartphone market, thereby lowering prices and benefiting consumers.