EU Fines Google $5 Billion, Accusing Them of Antitrust Abuse with Android. Is This Fair?

The European Union has been delving into the technology world as of late, such as with their GDPR policy. Now they have fined Google $5 billion for antitrust abuse with the dominance of its Android operating system. Was this a fair decision?

Google, owned by Alphabet, was fined a record $5 billion (4.34 billion euro) by EU regulators because the Android mobile OS dominates smartphones, creating an antitrust issue. Google has announced they will appeal the decision because they believe they are creating more choice and not less.

However, officials with the EU insist that Alphabet has been unfair with its own services by forcing and paying smartphone manufacturers to sell their smartphones with Google Chrome and Google Search pre-installed as a bundle, along with Google Play. They also prevent these manufacturers from selling smartphones that have modified or “forked” versions of Android.

Alphabet was ordered by the European Commission to stop all illegal conduct within ninety days or possibly face more charges. This is the largest amount of money Google has ever been fined, including last year when they were penalized $2.7 billion for favoring their shopping service over others.

The EU compared Google to its largest competitor, Apple, saying they did “not sufficiently constrain” Google, but they also pre-install several apps on their iPhones.

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This was an effort by the EU to protect consumers, with EU Commissioner for Competition Margrethe Vestager telling CNBC, “They have products that we all like and like to use. The only thing we don’t like is when they get to misuse their success and put in place illegal restrictions.

Sundar Pichai, Google’s CEO, wrote in a blog post that the commission ignored “the fact that Android phones compete with iOS phones.” He added that the EU didn’t consider the choice Android offers phone manufacturers, mobile network operators, app developers, and consumers.

Pointing to the app bundling they do, Pichai reasoned that if users don’t want to use Google’s pre-installed options, it’s easy for them to install alternatives. He suggested the decision could “upset the careful balance” Google has with Android. They let phone manufacturers use Android, which is open source, for free, yet it generates advertising revenue for them when consumers use it.

In a nutshell, it seems at first that Google is being fined because it’s free and open source, but that’s not the totality of it. In reality, they aren’t really being fined because they’re free and open source, but the Android OS appears on so many different devices because they are free and open source, and the more devices they appear on, the more they’re dominating the market.

Additionally, it seems they’re being fined because they’re so successful. They have so much wealth in the company that $5 billion isn’t going to bankrupt them, but it begs the question if they were fined that amount simply because they have that kind of money.

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And in both of these arguments we have to compare Google to Apple, Android’s largest competitor. They also install their own software on their devices. But that’s where the difference lies: their own devices. Apple isn’t paying anyone else to host their software. It only appears on their own devices.

Apple’s iOS software also isn’t open source. And because of that, there are no worries of it flooding the marketplace. There is no danger of multiple companies installing it on their systems. Apple would never allow it.

But where they are similar is in being a tech company with great wealth. Like Android, they, too, are the recipient of many big-money lawsuits and rulings. They can afford it, so it’s easy to dump on them.

In the end, despite the EU’s approach being understood, it still seems a bit unfair. No matter how they got to that, in essence they are still being fined because they are open source and free and because they have the wealth to support such a fine.

How do you feel about the EU’s fine of Google? Do you feel it’s fair for them to be fined because Android appears on so many smartphones and because it’s open source? Is it fair for them to have such a huge fine thrown at them simply because they can afford it? Let us know how you feel about this in the comments section below.

6 comments

  1. History repeats itself.
    MS with a dominant Windows position tried to impose IE on us, they had to separate and pay, so I guess Google will as well.
    I think that is good for the smaller companies that are also making all kind of beautiful browsers.

  2. That’s some leap from “Alphabet has been unfair with its own services by forcing and paying smartphone manufacturers to sell their smartphones with Google Chrome and Google Search pre-installed as a bundle, along with Google Play. They also prevent these manufacturers from selling smartphones that have modified or “forked” versions of Android.” to being fined for being open source.

  3. I dislike Google and will not use any Google products and recommend that my customers not use Google products.
    Google is a bully, a spy and a lot of other unsavory things BUT SO ARE MANY TECH COMPANIES (and other companies, organizations and governments as well).

    EU, though, has made two mistakes:
    1. The ruling itself seems to be flawed
    2. They picked on the wrong bully.

    They fail to realize that competition sharpens the market in most instances (and we NEED competition with products such as Windows because it REALLY needs sharpened – what a price of trash), brings better and lower cost products to the consumer and, if consumers are smart/wise/educates (which Windows proves they are NOT), the marketplace will shake out the bad/overpriced/unnecessary product. IF the marketplace isn’t tinkered with – which is what EU is doing.

    Stop and think for a minute of the effect on the economy and the every day lives of those who suffer under EU if their idiot regulators decided to BAN Google products! Their economy would suffer significantly and every day lives would be upset.

    Regardless of whether we like Google or not, this is BAD public policy.

    • “2. They picked on the wrong bully.”
      Why? Because Alphabet is going to pick up its marbles and go home? There is only one chance of that happening – NONE. Google is making too much money to abandon EU market.

      “They fail to realize that competition sharpens the market”
      That only happens when there is true competition during which everybody has equal access to the market and when the bigger/richer companies do not gobble up the possible competition.

      “we NEED competition with products such as Windows because it REALLY needs sharpened”
      With Windows still controlling over 70% of the market, that is very unlikely to happen. Who is Microsoft’s competition in the O/S market? Apple? Linux? Google’s Chrome OS? Unless somebody grabs at least 30%-40% of the O/S market, MS will not seriously start working on “sharpening” Windows.

      ” Their economy would suffer significantly and every day lives would be upset.”
      With that statement you have proven EU’s case that Google IS in effect a monopoly. If it weren’t, removing Google products and/or Google from a particular market would not affect the economy too much. And who knows, maybe some European company/companies, that are currently stifled by Google, night emerge to pick up the slack.

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