Google faces penalty for unfair trade practices

 

EU warns Google of stringent action if it doesn’t comply with its orders

Google is fined with $6.85 billion by the European Union Competition Commission in the Android antitrust case. Google has been under the scanner since 2011 and the decision to fine Google came after the EU Competition Commissioner Margrethe Vestager called on Google Chief Executive Officer Sundar Pichai late Tuesday.

The call was a usual step taken to alert businesses of impending penalty by the EU. As soon as Sundar Pichai came to know about the EU decision to fine Google, he wrote a quick blog describing the choices Android has for consumers demand and how the EU decision would impact the Android business model. He also maintained the Google would appeal against the decision.

A brief account of the Android antitrust case

Google forced made Android mobile manufacturers and telecom companies to sign a contract making Google Search, Chrome browser app and other Google services mandatory for Play app store license. This forceful inclusion of services was done to further strengthen its position in the online search market. Apart from this contract, Google was also charged with bribery.

The EU Competition Commission leveled three charges on Google

The commission charges Google of stifling competition for personal gains at the loss of consumers that could have more choice in a healthy competitive environment.

Here’re the charges

Google tying its services with Play Store is illegal

It was found that Google’s licensing policy for Play Store prevents the Android phone manufacturers from third-party apps. Google tied its search and browser service to Android making it necessary to pre-install Google Search and Chrome browser to use Play Store. The users can change the default setting but many users don’t as they’ve little problem with Google Search and Chrome. But this policy keeps others like Microsoft and budding players like Amazon out of the market.

Encouraging Android phone manufacturers and mobile network operators to preinstall Google Search and Chrome app

It was found that Google made illegal monetary transactions to OEMs and mobile networks from 2011 to 2014 and the money was provided to preinstall Google Search and Chrome application on Android devices. The commission said it harmed the competition by keeping the other players out of the market. Google discontinued its practice of paying the manufacturers and networks for pre-installation of its services in all Android devices in 2014.

Obstructing development of Android alternatives through illegal ways

Some mobile manufacturers have developed forked Android versions but Google doesn’t approve those versions and insists that manufacturers commit to using Google proprietary services and apps in their Android mobiles. And it is threatening the forked Android developers for using alternatives since 2011. The EU commission took strong note of this practice by calling it abusive on the part of Google.

Google is given 90 days to stop all its illegal practices and bring in a fair and objective system to support Android devices. Also, the EU Competition Commission has decided to keep a close watch over Google’s compliance with its orders.

The EU Competition Commission further warns Google of paying up to 5% of the average daily worldwide turnover of Alphabet, if it fails to fully comply with its orders. Alphabet is the parent company of Google. Also, the commission makes Google liable to face civil actions from people and businesses that faced financial losses due to Google’s policies.

Google’s lame excuse

Google argued that it faces stiff competition from Apple. It considers Apple a touch competitor and wants to save Android devices from iPhones with its policies. But the EU Commission dismissed this argument saying that Apple doesn’t eye Google’s business.

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