Google fined Sh500bn for breach of European Union antitrust rules

Google fined Sh500bn for breach of European Union antitrust rules

Speaking in Brussels, Vestager said preinstallation was an advantage that could create a "status quo" bias, in which people are far more likely to use search apps and browsers already present on their devices and are unlikely to download competing apps.

Google's officials immediately responded, saying the company willappeal the European Union fine by the Margrethe Vestager's team. "This reduced the ability of rivals to compete effectively with Google", the EC said.

For the second time in as many years, the European Commission has issued its largest ever fine against Google.

Google has reportedly been given 90 days to amend its carrier and OEM contracts to comply with the EU's rules, which could mean smartphone makers that use the Google Play Store no longer need to include Google products (like Chrome) by default on their handsets. Google would also need to stop preventing forked Android versions from coming to the market without its approval. The conditions Google puts as part of the Android license agreement with phone makers is what the regulator considers illegal. "It also misses just how much choice Android provides to thousands of phone makers and mobile network operators who build and sell Android devices; to millions of app developers around the world who have built their businesses with Android; and billions of consumers who can now afford and use cutting-edge Android smartphones". The imposed regulations on Google might lead to some rampant changes in the Android operating system.

That's the kind of antitrust fine record that's going to be hard to break, not that any other company might be interested in doing it.

Among them was requiring manufacturers to preinstall Google's browser and search apps to access Google's app store, Google Play.

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The EC explained that although market dominance is not illegal, dominant companies are not allowed to abuse their powerful position by restricting competition.

The Commission focused on three specific Google trade practices, which it found to be illegal.

Google argues that its main way of making money from Android is through advertising and the sale of content and apps, unlike Apple, which makes its profits from device sales. Android's code is open-source, meaning it can be tweaked and edited by device manufacturers. "We welcome the European Union cracking down on Google's anti-competitive search behavior. Finally, Google obstructed the development of Android forks, which could have provided a platform also for other app developers to thrive".

Google, which can appeal any decision, has rejected the EU's case since the bloc first issued charges two years ago.

The new $5 billion fine would undoubtedly force Google to revamp its strategy of delivering personalized search results since the whole paradigm is based on Google search and its entire app ecosystem. After that, the company can be fined up to 5 percent of its parent company Alphabet's daily revenue for non-compliance. That's because Google's business practices are being called into question and the search giant isn't winning any arguments.

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