Google will reportedly seek a $5.15 billion EU fine for ending Android contracts

Google will reportedly seek a $5.15 billion EU fine for ending Android contracts

Tech Highlights:

  • Google is reportedly set to dispute the fine during an upcoming five-day hearing at the General Court, the EU’s second highest court. The hearing is expected to begin on Sept. 27. The General Court told Reuters that it could not confirm the report because the “dates have not been made public for now,” while Google declined to comment.

  • According to reports, Google LLC is attempting to reverse a 4.34 billion euro antitrust penalties it was assessed by European Union regulators in 2018 for several agreements it had made with Android handset manufacturers. Reuters was informed of the change by sources with knowledge of the situation, and this morning it was reported. In 2018, a court ordered Google to pay 4.34 billion euros, or roughly $5.15 billion.

The 4.34 billion euro antitrust fine at the center of the matter was handed down to the search giant in July 2018 by the European Commission, the EU’s executive branch and top antitrust enforcer. The commission issued the penalty following a years-long investigation into Google’s Android operating system. Officials found that the company engaged in a number of unfair business practices when it licensed Android to handset makers for installation on their devices.

“In this way, Google has used Android as a vehicle to cement the dominance of its search engine,” European Commission Executive Vice President Margrethe Vestager said when the fine was announced in 2018. Another focus of the antitrust investigation was Google’s approach toward third-party Android versions. Google distributes the code for Android under a free open-source license. Consequently, a handset maker can theoretically create a custom version of the operating system and ship it with its devices. The commission found that Google prevented handset makers from using a custom version of Android without the search giant’s approval.

Android users mainly download apps from Google’s Play Store marketplace. Officials found that Google required handset makers to preinstall the Google Search and Chrome apps on their devices as a condition of accessing the Play Store. Furthermore, the company was found to have paid certain large mobile device manufacturers, as well as a number of wireless carriers, not to pre-install any competing search engines on their devices.

Google’s reported plan to appeal the fine at the General Court suggests that the company believes there may be compelling counterarguments to the conclusions of the antitrust investigation. When the fine was announced, Google made the case that the contractual conditions it imposed on handset makers have helped ensure the health of the Android ecosystem.

“The phones made by these companies are all different, but have one thing in common — the ability to run the same applications,” Alphabet Chief Executive Officer Sundar Pichai wrote in 2018. “This is possible thanks to simple rules that ensure technical compatibility, no matter what the size or shape of the device.”

According to the Reuters, Google has the support of the Application Developers Alliance and the Computer & Communications Industry Association lobbying groups, as well as two European handset makers. The Commission has the support of the European Consumer Organisation as well as a number of publishing groups and regional search engine providers.

Android is set to once again face regulatory scrutiny in the EU as part of a new antitrust probe the commission launched last month to investigate Google’s ad business. Android apps track users for advertising purposes using a technology called Advertising ID, which helps marketers personalize promotions to each customer’s interests. Google recently announced plans to roll out an opt-out option that will let users disable Advertising ID. The new antitrust probe will examine whether the change may have a negative impact on the online advertising ecosystem.

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