Google Fined Record $5 Billion by EU, Given 90 Days to Stop ‘Illegal Practices’
 

Google received a record 4.3 billion-euro ($5 billion) antitrust fine from the European Union and was ordered to change the way it puts search and web-browser apps onto Android mobile devices.

The penalty -- the same amount the Netherlands contributes to the EU budget every year -- is far higher than any other dished out by the U.S., Chinese or other antitrust authorities. More significantly, Google was given until mid-October to stop what the EU called "illegal practices" on contracts with handset manufacturers that push its services in front of users. It faces daily fines of 5 percent of revenue if it doesn’t obey.

Google owner Alphabet Inc. generated about the same amount of money as the penalty every 16 days in 2017, based on the company’s reported annual revenue of $110.9 billion.

"The fines are still relatively minuscule" for a company the size of Google, said Maurice Stucke, a law professor at the University of Tennessee and a former U.S. Justice Department attorney. "They also have to, within 90 days, stop the practice so that can have more teeth."

The search giant 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 has used Android as a vehicle to cement the dominance of its search engine," EU Competition Commissioner Margrethe Vestager told reporters. “These practices have denied rivals the chance to innovate and compete on the merits."

Google immediately said it would challenge the ruling at the EU courts. An appeal wouldn’t change its need to comply with the EU order, unless it gets judges to allow "interim measures" that halt the commission findings.


In a statement posted online, Google Chief Executive Officer Sundar Pichai said the EU decision “rejects the business model that supports Android, which has created more choice for everyone, not less.” Users can easily disable or delete apps that are loaded on their phone and Google only earns revenue "if our apps are installed and if people choose to use our apps instead of the rival apps," he said.

Vestager said it was “solely” up to Google to determine how it can comply with the EU order. “The obvious minimum” is that the “contractual restrictions disappear,” she told Bloomberg TV in an interview. She wouldn’t be drawn on how Google could or should change the way it distributes apps and makes money from the Android software it gives away.

Google declined to say what changes it might make to comply with the EU order.

Alphabet shares were unchanged at $1,212.98 while the S&P 500 Index was little changed at 11:56 a.m. in New York.

Read more: https://www.bloomberg.com/news/artic...f-android-fine

The EU needs to be put out of its misery

That's a huge fine...