Life Tech Google hit with record $6.85 billion fine

Google hit with record $6.85 billion fine

Google Android fine
Google has been forced to pay a record sum for its Android mobile device. Photo: Getty
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Google has been hit with a record $6.85 billion fine for unfairly pushing its Android mobile operating system on smartphone users and freezing out competitors.

The European Commission fined the tech giant on Wednesday night (AEST), saying it broke the law by requiring manufacturers to install its Google Search and Chrome apps as a condition for licensing Google’s app store.

The penalty is close to double the previous record fine of $3.7 billion – which Google was forced to pay last year for prioritising its online shopping search service ahead of competitors.

“Google has used Android as a vehicle to cement the dominance of its search engine,” Margrethe Vestager, Europe’s top antitrust official, said in a statement.

“They have denied European consumers the benefits of effective competition in the important mobile sphere,” she added.

She said the largest ever imposed by the European Commission reflects the “seriousness and sustained nature” of the violations.

Google has been ordered to stop the practices within 90 days or face further penalties of up to 5 per cent of its average global daily 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,” Ms Vestager said.

Google fine
Google reportedly have cash reserves of almost $140 billion. Photo: Getty

The company said it would appeal the fine, despite the large sum representing just two weeks of revenue for parent company Alphabet Inc.

Google’s chief executive Sundar Pichai made the argument in a blog post that Android has created more choice, not less, “Rapid innovation, wide choice, and falling prices are classic hallmarks of robust competition and Android has enabled all of them”.

“Today’s decision rejects the business model that supports Android, which has created more choice for everyone, not less,” he wrote.

The Commission has been investigating Google’s use of Android since 2013 after European and American rivals, including lobbying group FairSearch, complained.

It said that about 80 per cent of the world’s smartphones runs on Android, according to market research firm Strategy Analytics.

A third EU case, which has not yet concluded, involves Google’s AdSense product.

-with agencies