EU regulators on Wednesday struck Google with a record fine for breaching antitrust laws. The antitrust regulators found out that Google, which is owned by Alphabet, Inc., had abused the market dominance of its Android OS for mobile phones.
Citing sources familiar with the investigation, Reuters reported that the regulators have decided to hit the search engine giant with a penalty of €4.3 billion ($5 billion) for its actions.
It is the largest fine the European Union has ever imposed on single firm.
In their investigation, the regulators found the company had used unscrupulous methods by forcing smartphone manufacturers to pre-install Google apps and services, in order to use the Google Play app store.
The probe further determined that Google paid anti-competitive incentives to smartphone makers, when they pre-installed Google search and avoided other competitor services.
The EU has been investigating Google for roughly eight years for breaking the antitrust rules of the bloc in a number of areas.
Last year, the regulators asked the company to pay a fine of €2.42 billion ($2.71 billion) for favoring its own comparison-shopping service by manipulating search results.
Google controls 80% of the global smartphone market through its Android operating system. European regulators have long criticized its dominance, arguing that it should play fairly to avoid shutting out smaller rivals.
The regulators have now given the company a period of 90 days to put an end to its illegal activities within the bloc, or else face additional penalties of up to 5% of its parent company’s average daily global turnover. –Reuters
On its part, Google argues the regulators have defined the market wrongly and misunderstood consumer behavior.
Alphabet’s Senior Vice President and General Counsel Kent Walker, has criticized the EU for assuming that Android does not compete with Apple iOS.
Google also defended itself saying it is impossible to block rivals even when its apps are bundled or pre-installed phones, as competitor apps are easy to download right away.
The company said the licensing terms are just minimum requirements to see to it that its operating system works efficiently on various gadgets.
Shares of Alphabet, Inc, lost more than 6 dollars before the opening bell on Wednesday. –CNBC
About Alphabet, Inc.
Alphabet, Inc. engages in the provision online advertising services in the US and globally. The company operates through Google and Other Bets segments. It offers brand and performance advertising services.
The Google segment offers principal Internet products, including YouTube, Chrome, Ads, Google Maps, Android, Google Play, Commerce, Google Cloud, Hardware, and Search.
In addition, it offers enterprise cloud services, hardware products, and digital content, as well as miscellaneous services and products.
The Other Bets segment involves businesses, such as Nest, Access, GV, Calico, Verily, CapitalG, X, and Waymo, as well as Television and fiber Internet services.
The competitors of the company include Apple, Yahoo, Microsoft, Yandex, Amazon, Baidu, eBay, Naver, LinkedIn, Seznam, Kayak, WebMD, Criteo, Twitter, Facebook, Hulu, AppNexus, and Netflix
Alphabet Inc. was founded in 1998 by Sergey Mikhaylovich Brin and Lawrence E. Page. Its headquarters are located in Mountain View, California. –Reuters