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EU Fines Google $5.1B for Abuse of Power

Google and the European Union are certainly not on friendly terms right now, and haven’t been for quite some time. That’s because Google’s business practices are being called into question and the search giant isn’t winning any arguments. The latest focus of the EU is Android, and the result is a huge fine and demand for change.

In June last year, the EU fined Google £2.7 billion[1] for illegally steering users toward its comparison shopping website. This week, another fine of £5.1 billion was doled out because Google was found to be abusing its power in the smartphone market. As The New York Times[2] reports, the record fine is a response to the deals Google strikes with handset manufacturers who opt to use the Android operating system.

Google requires that these third-party handsets use Google’s search bar and default to the Chrome browser in return for access to the latest versions of Android. Financial incentives were also being offered to both handset makers and wireless carriers in return. European officials concluded that the signed agreements Google required could not be refused and therefore limited competition.

By doing these deals, Google has broken European antitrust laws and therefore must be punished, but also forced to change its practices. Therefore, alongside the £5.1 billion fine, Google has been given 90 days “to end its practices.” As you’d expect, Google intends to appeal the ruling and in so doing push back the date at which it needs to stop offering and enforcing these agreements that favor its services.

If the ruling stands, consumers within the EU could soon find many more Android smartphones being offered with non-Google web browsers and search engines set as the default.

It could be years before that happens, though.

References

  1. ^ EU fined Google £2.7 billion (uk.pcmag.com)
  2. ^ The New York Times (www.nytimes.com)

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