Google facing record $5 billion fine over controversial Android practices

Google facing record $5 billion fine over controversial Android practices

Google will be fined around 4.3 billion euros ($5 billion) by the European Union over Android apps on Wednesday, setting a new record for antitrust penalties, according to a person familiar with the EU decision. Also, the company should let mobile manufacturers sell devices based rival operating systems based on Android's open source code and also let them pre-install their own search services and apps.

The European Commission also hit Google with a separate antitrust penalty of $2.7 billion previous year, relating to violations in the way it presents shopping results in Google Search-a service with a market share in Europe of over 90%.

'These practices have denied rivals the chance to innovate and compete on the merits. The other practices banned by the European Union include Google's payments that were conditional on exclusively pre-installing Google Search and preventing device makers from installing competing versions of Android.

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.

The record-setting fine almost doubles the €2.4 billion ($2.8 billion) penalty levied against Google past year for pushing its own shopping results to the top of search pages.

While the fine is a record, it represents just two weeks of Google's yearly revenue.

Google will be appealing the decision. "Google can not have its cake and eat it", said Vestager.

"Today, mobile internet makes up more than half of global internet traffic", Ms Vestager added.

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Google has already been targeted over similar violations in Russian Federation, where it was forced to make it easier for consumers to use rival search engines.

Google prevents hardware makers that want to pre-install Google apps from selling even a single mobile device running on alternative Android versions (or "forks") that were not approved by Google.

Vestager has charged Google in the past.

The fine is based on the fundamentals of how Google's Android operating system operates. Competition authorities have said Google prevented third parties using its product from displaying search advertisements from Google's competitors.

"Android hasn't hurt competition, it's expanded it", Kent Walker, Google's general counsel, wrote in a 2016 blog post rebutting the EU's initial charges.

Google lost a similar battle in Russian Federation several months ago, but it only received a fine in the tens of millions of dollars.

"Android means manufacturers don't have to buy or build expensive mobile operating systems". The fact that Google was the default search engine was also seen as violating anti-trust, giving an unfair advantage to the company's own search engine.

"Today's decision rejects the business model that supports Android, which has created more choice for everyone, not less".

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