Google hit with record $ 5 b EU antitrust fine

Thursday, 19 July 2018 00:00 - - {{hitsCtrl.values.hits}}

European Competition Commissioner Margrethe Vestager addresses a news conference on Google in Brussels, Belgium - REUTERS

BRUSSELS (Reuters): EU regulators hit Google with a record EUR 4.34 billion ($ 5 billion) antitrust fine yesterday for using its Android mobile operating system to squeeze out rivals.

The penalty is nearly double the previous record of EUR 2.4 billion, which the US tech company was ordered to pay last year over its online shopping search service.

It represents just over two weeks of revenue for Google parent Alphabet Inc. and would scarcely dent its cash reserves of $ 102.9 billion. But, it could add to a brewing trade war between Brussels and Washington.

EU antitrust Chief Margrethe Vestager denied anti-US bias, saying she very much likes the United States.

“But, the fact is that this has nothing to do with how I feel. Nothing whatsoever. Just as enforcing competition law, we do it in the world, but we do not do it in political context,” she said.

Google said it would appeal the fine.

“Android has created more choice for everyone, not less. A vibrant ecosystem, rapid innovation and lower prices are classic hallmarks of robust competition,” it said.

Vestager’s boss, Commission President Jean-Claude Juncker, is due to meet US President Donald Trump at the White House next Wednesday in an effort to avert threatened new tariffs on EU cars amid Trump’s complaints over the US trade deficit.

Vestager also ordered Google to halt anti-competitive practices in contractual deals with smartphone makers and telecom providers within 90 days or face additional penalties of up to 5% of parent Alphabet’s average daily worldwide turnover.

“Google has used Android as a vehicle to cement the dominance of its search engine. These practices have denied rivals the chance to innovate and compete on the merits. They have denied European consumers the benefits of effective competition in the important mobile sphere,” Vestager said.

The EU enforcer dismissed Google’s argument of competition from Apple saying the iPhone maker was not a sufficient constraint because of its higher prices and switching costs for users.

Android, which runs about 80% of the world’s smartphones according to market research firm Strategy Analytics, is the most important case out of a trio of antitrust cases against Google.

Some major Android device makers, including Samsung Electronics Co., Sony Corp, Lenovo Group Ltd. and TCL Corp, declined to comment on the EU case.