Google fined a record $5 billion by the EU for Android antitrust violations

Illustration by Alex Castro / The Verge

Google has been hit with a record-breaking €4.3 billion ($5 billion) fine by EU regulators for breaking antitrust laws. The European Commission says Google has abused its Android market dominance in three key areas. Google has been bundling its search engine and Chrome apps into the operating system. Google has also blocked phone makers from creating devices that run forked versions of Android, and it “made payments to certain large manufacturers and mobile network operators” to exclusively bundle the Google search app on handsets.

The European Commission now wants Google to bring its “illegal conduct to an end in an effective manner within 90 days of the decision.” That means Google will need to stop forcing manufacturers to preinstall Chrome and Google search in order to offer the Google Play Store on handsets. Google will also need to stop preventing phone makers from using forked versions of Android, as the commission says Google “did not provide any credible evidence that Android forks would be affected by technical failures or fail to support apps.” Google’s illegal payments for app bundling ceased in 2014 after the EU started to look into the issue.

Google now says it will appeal the decision. “Android has created more choice for everyone, not less. A vibrant ecosystem, rapid innovation, and lower prices are classic hallmarks of robust competition,” says a Google spokesperson in a statement to The Verge. “We will appeal the Commission’s decision.” Google is also warning that the EU’s decision may affect the free business model of Android in the future.

The European Commission has been investigating Android more closely over the past year after rivals complained that Google has been abusing its market dominance in software that runs on smartphones. FairSearch originally filed a complaint against Google back in 2013, and the group included competitors like Nokia, Microsoft, and Oracle. Former Microsoft CEO Steve Ballmer also called Google a “monopoly” at the time, one that authorities should control. While Google and Microsoft ended their Android patent disagreements a few years ago, that hasn’t stopped the EU from investigating the original allegations.

The $5 billion fine dwarfs Google’s previous $2.7 billion record-breaking fine from the EU last year over manipulated search results. Google is still appealing that particular judgment in a back-and-forth that’s expected to last years. Facebook, Intel, and Microsoft have all faced significant anti-competition fines from the European Commission. Microsoft was famously fined twice by the EU after the software maker failed to include a browser ballot in a Windows 7 update. Apple was also ordered to pay back $15.4 billion in taxes to the European Union.

EU antitrust tech fines

Ranking Company Year Amount
Ranking Company Year Amount
1 Google 2018 €4.34 billion
2 Google 2017 €2.42 billion
3 Intel 2009 €1.06 billion
4 Microsoft 2008 €899 million
5 Microsoft 2013 €561 million
6 Facebook 2017 €110 million

Android has long been considered open-source software, but Google has slowly been adding key components into its Google Play Services software and associated agreements. Alongside anti-fragmentation agreements to keep manufacturers on Google’s version of Android, most Android handsets (outside of China) now ship with Google’s software and services bundled on them.

The EU has now ordered Google to adhere to its judgment within 90 days and unbundle search and Chrome from its Android offering. With Google appealing the decision, the legal process is likely to run for many years ahead. While many had expected Google to face its own “Microsoft moment,” the EU doesn’t seem to be forcing any strong future oversight on Android or asking Google to modify its software to include a ballot for alternative browsers or search engines.

This decision seems to be more about preventing Google from bundling its services to Android, than forcing the company to change Android significantly. Phone manufacturers will still be free to bundle Chrome and Google search apps if they wish, but they won’t be forced to do so, and they’ll be free to offer devices with forked versions of Android.

Comments

The problem is not that Google apps are bundled into the operating system. The problem is that apps requires(!) certain Google apps to even function.

Want to play a modern game? Half of them won’t work without Google Play Games.
Want to use a somewhat popular app? Tough luck if you don’t have Google Play Services.

Can operators and third parties build replace for Google play games and Google play services, the answer is yes and they can pre install it on the phone but as they have found continuously consumers don’t want bloatware on their devices. That one of the reason apple iphone is so popular, no third party bloatware to be found anywhere.

Yup and owning a minority of the market share in pretty much every area they compete in is very beneficial. Google is running into a similar kind of issue Microsoft did in the 90s. By having a closed ecosystem, Apple is allowing themselves to stay a minority. It has always been their wisest move.

Eh, if Apple had majority market share, they would be hit with the same fine.

Would they, though? Because, in this case, the issue is Google essentially pushing around other phone makers that want to use their OS. Nobody but Apple makes Apple’s phones, and I would argue that in the ’90’s, if Microsoft had been making their own hardware at the time and the only devices running their software was their hardware, they too would have avoided the infamous fines.

if Microsoft had been making their own hardware at the time and the only devices running their software was their hardware, they too would have avoided the infamous fines.

They still would IF that hardware had 90% of the market. But that was never going to happen because MS weren’t in the hardware market. They were in the business of selling business software

The Microsoft issue was about them pushing their browser above third party browsers. There is very little difference between that and Apple pushing Safari on iPhone users. Even worse, Apple forces other browser developers to use the iOS webkit tools, virtually guaranteeing that Safari will always be the fastest and most streamlined browser on iOS.

You don’t think that the EU would be fining Apple right now if they could, regardless of market share?

Their laws specifically apply to companies with a dominant market share in Europe, eg >50%, which iOS does not have. So yes, if they could fine they probably would.

LOL. It’s funny how one of the most complained about things in reviews is how "there’s so much carrier or OEM installed bloat on this phone" and never "ugh there’s that damn Chrome browser again." This move doesn’t really benefit consumers at all.

I’m sure most manufacturers are just going to include it anyway… the fine does seem a bit extreme though, considering as you say, it’s really in the consumers interests to have Chrome!

I agree that most will include it but I wouldn’t put it past Samsung to only load their browser and make you download Chrome yourself.

There do have replacement for all these Google service in China where phones does not come with play services, but the result is unended wake-up calls from individual applications trying to retrieve update by themselves which is greatly detrimental to battery life, apps trying to stay in memory to get notification from their own server or server of different larger app developers which make 6GB RAM necessary and even common place among budget phones, and also various games distribution channels that would take 70% revenue away from app developers and charge extra for recommendations that make Apple’s 30% seems really kind in contrast.

In China they have WeChat. One single app that does everything, one app to rule them all.

Yes and as I understand it from the OEM’s its an all or nothing situation for google services. If you want to bundle Google Play Services/Games you have to bundle search, google play and a bunch of other apps that google are pushing…… You can’t realistically create a popular AOSP phone because of the demand for core google services. Apple are no angels at this either with service bundling, they both need looking at.

It really is all tied up and although $5 billions sounds like a lot the benefits they have received are much greater. The competion is pretty much all gone already so this is may be too late no matter what the sanctions are.

Amazon are perhaps the only company that has even managed to make a dent on google services but that is only in the currently smaller tablet and tv markets. But if you need the kind of aggressive pricing and money that Amazon has to enter the market there is something wrong.

There numerous fault versions of Android around, in China and Russia mainly and as you say US in the form of Amazon.

The fact the decision makers didn’t include Apple in this an refuse to look at the whole industry is the reason why this should be chuck in the bin and the EU commission sent home to redo it homework, after a good spanking by the judges and told to look at the whole of the mobile phone market.

The versions in China and Russia are not Android™ and are irrelevant anyway as this case is Europe where phones are exclusively 100% Google Android™

Pretty sure they are relevant since quite a good number of oems build version for china without google services and versions to sell outside china.

Google services don’t work in China so Google doesn’t bind OEMs to bundle them for the Chinese market. They’re free to do whatever they want in China.

That’s turned out great for them… it’s a virus free utopia of seamless services and up to date, secure phones… oh wait. I think this will just result in more Nexus devices in the EU… to avoid the whole OEM stuff, same result though. It’s not the first time Google has used fun legal tricks in the EU… think double Irish with a dutch sandwich plus.

Don’t pretty much all major us companies go to the same sandwich shop?

And how may of those sell in Europe?
Zero.
So its irrelevant.

Not really, it shows that OEM can do it they aren’t to lazy to do so. Why punish google for other laziness.

Well they are android. They just don’t have google play services to be precise. Android is a wonderful gift to the world while google play services are the golden handcuffs.

Well they are android.

But they cant call themselves that

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