European Union plans record $5B fine on Google over mobile system

EU news Google Android fine

EbSEU competition commissionner Margrethe Vestager announces €4.3bn fine on Google

Android is the most popular mobile software in the world. In June 2017, it fined Google $2.7 billion for abusing the way it prioritizes its own shopping results in search, bringing the total sum accrued in fines by the company within the European Union to $7.2 billion over the course of just 13 months.

Vestager could also force Google to unbundle Chrome or Google Play services from Android installs, something she sees as Google illegally "tying" these apps to smartphones.

Its popularity in turn could mean an uphill battle for European Union antitrust regulators seeking to level the playing field for Google's rivals. The company has been given 90 days to end this practice or face more fines.

Google said it would appeal the fine. Rivals couldn't compete with these payments, making it hard for any other search engine to get their app pre-installed. Google makes around $30 billion in revenue per quarter right now and its parent company, Alphabet, turned over more than $100 billion a year ago.

Google chief executive Sundar Pichai had a call with EU Competition Commissioner Margrethe Vestager late on Tuesday for a so-called state of play meeting, a usual step to alert companies of an impending penalty, according to one of the people, who asked not to be named because the discussion is private. Competition authorities have said Google prevented third parties using its product from displaying search advertisements from Google's competitors.

The company also limited the ability of manufacturers to sell phones running alternative versions of Android.

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Smartphone makers are allegedly discouraged from releasing devices that are based on the Android open source code but not affiliated with the Google-owned property.

The Commission's decision was delayed by a week by US President Donald Trump's visit to a North Atlantic Treaty Organisation summit in Brussels last week.

The EU's biggest ever punishment targeted Apple in 2016 when it ordered the iconic maker of iPhones and iPads to pay Ireland 13 billion euros ($16 billion) in back taxes that it had avoided by a tax deal with Dublin. The company also says the allegation that it stymied competing apps is false because manufacturers typically install many rival apps on Android devices-and consumers can download others.

When the first Android phone went on sale a decade ago, Google made a bet: Its free operating system would hook smartphone makers, allowing it to disseminate apps and bolster its online ad business in the emerging era of smartphones.

Despite Google being adamant it isn't doing anything wrong, it has already made some concessions in Russian Federation where the consumer watchdog laid down similar claims.

If Brussels decides to use the full extent of its powers, it could hit Google with a fine that equals 10pc of its global turnover or around €9.8bn.

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