The penalty – a record setting one for antitrust penalties is far higher than any other dished out by the U.S., Chinese or other antitrust authorities. More significantly, Google was given 90 days to stop what the EU said were “illegal practices” on contracts with handset manufacturers that push Google services in front of users.
“Google has used Android as a vehicle to cement the dominance of its search engine,” EU Competition Commissioner Margrethe Vestager said in an emailed statement. “These practices have denied rivals the chance to innovate and compete on the merits.”
Google has built a massive business of banner and videos ads, thanks largely to its central role on Android devices. Google will account for a third of all global mobile ads in 2018, according to research firm eMarketer, giving the company around $40 billion in sales outside the U.S. Google risks losing that traction if it is forced to surrender its real estate on millions of Android phones.
Google immediately said it would challenge the ruling at the EU courts.
“Android has created more choice for everyone, not less,” Google spokesman Al Verney said in an emailed statement. “A vibrant ecosystem, rapid innovation and lower prices are classic hallmarks of robust competition.”
The EU’s decision would bring the running total of Google fines to about 6.7 billion euros after last year’s penalty over shopping-search services. It could soon be followed by more fines from a probe into online advertising contracts.
The European Commission fine exceeds last year’s then-record 2.4 billion-euro penalty following an investigation into Google’s shopping-search service. Google owner Alphabet Inc. and the commission both declined to comment on the Android fines.
Alphabet generated about the same amount of money as the record penalty every 16 days in 2017, based on the company’s reported annual revenue of $110.9 billion for the year.
Alphabet shares were down 0.5 percent in pre-market trading in New York on Wednesday.
Any appeal by Google wouldn’t change its need to comply with the EU order, unless it gets the EU court to allow “interim measures” that halt the commission findings.
