European Commission fines Google €4.34bn for illegal restrictions on Android devices

Google has 90 days to end the practice or face penalty payments

European Commission fines Google €4.34bn for illegal restrictions on Android devices

EU Commissioner Margrethe Vestager holds a press conference on a competition xase involving Google Android at the European Commission building in Brussels | Image: Olivier Matthys/AP/Press Association Images

Search engine giant Google has been handed a €4.34bn fine by the European Commission over illegal practices regarding Android mobile devices.

The Commission says since 2011, Google has imposed illegal restrictions on Android device manufacturers and mobile network operators to "cement its dominant position" in general internet search.

"Google must now bring the conduct effectively to an end within 90 days or face penalty payments of up to 5% of the average daily worldwide turnover of Alphabet, Google's parent company", it said.

"At a minimum, Google has to stop and to not re-engage in any of the three types of practices.

"The decision also requires Google to refrain from any measure that has the same or an equivalent object or effect as these practices."

File photo

Commissioner in charge of competition policy, Margrethe Vestager, said: "Our case is about three types of restrictions that Google has imposed on Android device manufacturers and network operators to ensure that traffic on Android devices goes to the Google search engine.

"In this way, Google has used Android as a vehicle to cement the dominance of its search engine.

"These practices have denied rivals the chance to innovate and compete on the merits.

"They have denied European consumers the benefits of effective competition in the important mobile sphere. This is illegal under EU antitrust rules."

Source: European Commission

The Commission said in particular, Google has required manufacturers to pre-install the Google Search app and Chrome browser app, as a condition for licensing Google's app store.

It also said Google made payments to certain large manufacturers and mobile network operators, on condition that they exclusively pre-installed the Google Search app on their devices.

It added that Google prevented manufacturers wishing to pre-install Google apps from selling even a single smart mobile device running on alternative versions of Android that were not approved by Google.

The Commission decision concluded that Google is dominant in the markets for general internet search services, licensable smart mobile operating systems and app stores for the Android mobile operating system.

It said: "Google is dominant in the national markets for general internet search throughout the European Economic Area (EEA), i.e. in all 31 EEA member states.

"Google has shares of more than 90% in most EEA member states. There are high barriers to enter these markets."

'Special responsibility' for dominant companies

But the Commission explained: "Market dominance is, as such, not illegal under EU antitrust rules.

"However, dominant companies have a special responsibility not to abuse their powerful market position by restricting competition, either in the market where they are dominant or in separate markets."

And it found Google engaged in three separate types of practices, which all had the aim of cementing its dominant position in general internet search.

These were the illegal tying of Google's search and browser apps, illegal payments conditional on exclusive pre-installation of Google Search, and illegal obstruction of development and distribution of competing Android operating systems.

The Commission said the fine of €4,342,865,000 has taken account of "the duration and gravity of the infringement".

"It is Google's sole responsibility to ensure compliance with the Commission decision.

Civil actions by member states

"The Commission will monitor Google's compliance closely and Google is under an obligation to keep the Commission informed of how it will comply with its obligations."

The Commission added: "If Google fails to ensure compliance with the Commission decision, it would be liable for non-compliance payments of up to 5% of the average daily worldwide turnover of Alphabet, Google's parent company.

"The Commission would have to determine such non-compliance in a separate decision, with any payment backdated to when the non-compliance started."

Google is also liable to face civil actions for damages that can be brought before the courts of member states by any person or business affected by anti-competitive behaviour.

This case follows a June 2017 ruling, in which the Commission fined Google €2.42bn for abusing its dominance as a search engine - by giving an illegal advantage to Google's own comparison shopping service.

The Commission said it is "actively monitoring" Google's compliance with that decision.

It is also continuing to investigate restrictions Google has placed on the ability of certain third party websites to display search advertisements from Google's competitors - known as the AdSense case.

In July 2016, the Commission preliminary concluded that Google abused its dominant position in a case concerning AdSense.