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?
The Ruling from the EU
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.
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.”
Google Fights Back
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.
Analyzing the EU Ruling
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.
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.