Google Facing Huge Competition Fine

Google could face a fine of billions of dollars over alleged anti-competitive behavior. It disputes the claims and says they don't take proper account of the role of Apple.

The fine would come from the European Union, which oversees competition across 28 countries. It's expected to rule against Google in the biggest of three investigations into the company.

All three investigations relate to a basic principle of EU competition law: it's generally OK for a company to dominate a market, and it's generally OK for a company to carry out anti-competitive behavior, but the combination of the two is not allowed.

Previous Fine Was Nearly $3 Billion

A previous investigation into Google's rules on comparison shopping sites led to a fine of €2.4 billion (US$2.84 billion). An investigation into its advertising setup is underway. (Source: politico.eu)

However, the big one is an investigation into Google's handling of the Android system is expected to conclude next month with a verdict against Google. The maximum fine could be 10 percent of parent company Alphabet's annual revenue, which would mean a fine of up to US$11 billion.

The investigation looked into claims that Google took advantage of the popularity of Android to unfairly promote its own apps and services. For example, it allegedly told smartphone manufacturers that they could only install key apps such as the Google Play store if they also pre-installed the Chrome browser and Google's dedicated search apps. It also allegedly offered "financial incentives" to install the search app. (Source: ft.com)

According to EU investigators, this unfairly restricted competition on three fronts: from other search companies, from other browser developers, and from other open source mobile operating systems.

Google Points To Apple As Competition

Google offered two main counters to the claims. Firstly it said the whole pretext was flawed because it didn't take into account Apple's market share on mobile devices. The EU says that's because Apple's operating system can't be licensed by other manufacturers.

Secondly, Google said it didn't make that much difference which apps were pre-installed because users can easily download and install apps themselves. That's a similar argument to the one Microsoft made regarding Internet Explorer being pre-installed on Windows PCs, an argument that didn't find favor with the EU.

What's Your Opinion?

Should Google be allowed to put whatever conditions it likes on phone makers who want to use Android? Should the EU take Apple into account when considering competition? Would a large fine for Google in this case wind up as a benefit for consumers?