The US company Google is to pay a fine of 4.1 billion euros for abusing its dominant position. According to the EU court, the Internet company had made illegal agreements in connection with the Android operating system.
On Wednesday, Google’s lawsuit against a decision by the EU Commission from 2018 failed. The European Court of Justice (EuG) confirmed the decision. However, the fine was reduced from 4.43 billion to 4.125 billion euros. However, this is still the largest fine imposed by a European competition authority.
The core of the allegations was that Google had made illegal agreements with device manufacturers of Android smartphones and mobile network operators, thereby restricting free competition. Should Google still object to this new judgment, the European Court of Justice (ECJ) would have jurisdiction in the next instance.
EU Commission sees Android’s supremacy abused
In their original decision the EU Commission cites Android’s position in the market. The operating system belonging to Google is by far the most used in the world. This would create a supremacy via the licenses for Android apps in the Play Store. The only exception is China, which has to do with the US ban on Chinese companies, among other things.
Above all, the EU Commission criticized the coupling of the Google search engine with the Play Store and the Android operating system. For example, manufacturers of Android smartphones are forced to preinstall Google Chrome. Precisely because it is an Internet company whose income is largely generated from the advertising revenue of the search engine, this coupling should be critically questioned. In summary, the accusation is that Google would try to protect the supremacy of the search engine and the resulting advertising revenue via Android – and vice versa.
The Commission supported this argument with facts: In July 2018, around 80 percent of mobile phones in Europe used an Android operating system. Most major smartphone manufacturers such as Samsung or, of course, Google itself use the system. Through
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EU court upholds allegations
Google objected to the Commission’s 2018 decision, which is why the European Court is now dealing with the matter. The court had to decide on three main points:
- Initially, it was about the fact that the manufacturers of mobile devices had to pre-install the Chrome Internet browser in order to get a license to use the Play Store. The court saw a competitive advantage in the condition of pre-installation because it established a status quo. Smartphone users in particular like to access browsers simply for the browser that is already installed.
- Google also tried to oblige smartphone manufacturers to only use operating systems approved by Google. Required licenses for products were only given if no modified versions of Android were sold on the devices. This practice represents a restriction of the innovations of the competition. The variety of available products would thus also be restricted for users.
- The third allegation revolved around the sharing of revenue from advertising deals. The search engine giant only wants to share money if the smartphone manufacturers and mobile network operators concerned agree to completely do without competing search engines in certain areas.
However, the court rejected this third accusation and followed Google’s reasoning. Accordingly, there is simply no equal competitor in the search engine sector. Because that is missing, no restriction of competition can take place through an assortment agreement. Otherwise, however, the court agreed with the decision of the EU Commission.
Google has already changed its approach
Google already changed its business model in the course of the proceedings in 2018. Since then, the individual services can also be integrated without Google search or the Chrome browser. Google criticized the demands of the EU Commission with reference to the advantages of bundling the apps. This is the only way to offer Google services across the board.
However, a dominant position is not advantageous for users of search engines. The selection of operating systems and search engines should always be guaranteed to users, if only so that they are not too dependent on one company. The extent to which Google is taking action against the decision of the EU court that has now been made remains open for the time being. Until then, the following applies: competition stimulates business.