Google has been fined a whopping £3.8bn (€4.3bn) by the EU’s European Commission today over its Android operating system for smartphones.
The European Commission has been investigating Google’s practises regarding search and advertising for years and has already issued massive fines over the way it holds a monopoly with online advertising.
This latest fine relates to Google’s search engine and the way it is bundled with its own software.
Google has confirmed in a tweet from its European Twitter account that it will be appealing the decision.
“Android has created more choice for everyone, not less,” it states. “A vibrant ecosystem, rapid innovation and lower prices are classic hallmarks of robust competition. We will appeal the Commission’s decision.”
The European Commission claims claims that Android phones are unfairly designed to use Google’s own search engine as the default means of looking for information on the web.
It believes this gives Google a monopoly as the company also uses its search engine to make vast amounts of money through advertising.
This is by no means the first time Google has been hit by a fine from the EU. Last year the Commission handed the tech giant a £2.1bn fine over its shopping tool which could often be found at the top of searches made through Google.
While Google disputes the claims made by the European Commission, some experts believe this is a turning point for the tech giant.
“It looks like this time the fine will fit the ‘crime’ in this long running dispute of market dominance and manipulation,” explains Professor Mark Skilton from Warwick Business School.
“Google claims that it has to compete with other big players and that swapping to an alternative search service is ‘one click away’, but in my view it is its locking up of around 80% of mobile devices with pre-installed Google Android software that is the issue.”
Google, of course, disagrees. In 2016 Google’s Senior Vice President Kent Walker published a blog post explaining why it believes that rather than hurting competition, Android is expanding it.
“The Commission argues that we shouldn’t offer some Google apps as part of a suite,” he writes. “No manufacturer is obliged to preload any Google apps on an Android phone. But we do offer manufacturers a suite of apps so that when you buy a new phone you can access a familiar set of basic services. Android’s competitors, including Apple’s iPhone and Microsoft’s Windows phone, not only do the same, but they allow much less choice in the apps that come with their phones.”
This is where the Commission’s response could really hurt Google. While the fine might seem substantial, Google’s more immediate concern is actually regarding any new rules that could be imposed which forces it to change the way it builds Android.
While it’s not clear yet what these rules might be, one of the responses by the European Commission could be that it demands Google separates its search engine, and the apps and services it provides from Android completely. Instead when you buy a phone you’ll be given a choice of browsers to download rather than just using Chrome by default.
That would fundamentally change the way Android functions as many of its apps and services are all tied together using its Google Assistant AI.