Google has been hit with a record-breaking €4.3 billion ($5 billion) fine by EU regulators for breaking antitrust laws. The European Commission antitrust watchdog, led by Margrethe Vestager, identified three key transgressions, which prompted the $5 billion fine:
- Requiring mobile device manufacturers to preinstall Google’s browser and search apps for access to the Play store.
- Paying manufacturers to exclusively preinstall Google Search.
- Preventing manufacturers from selling devices running alternative versions of Android.
Fine of €4,34 bn to @Google for 3 types of illegal restrictions on the use of Android. In this way it has cemented the dominance of its search engine. Denying rivals a chance to innovate and compete on the merits. It’s illegal under EU antitrust rules. @Google now has to stop it
— Margrethe Vestager (@vestager) July 18, 2018
The Commission said if these issues were not put right within 90 days, Google would be fined up to 5% of the global daily revenue of its parent company Alphabet.
Alphabet’s total annual revenue stood at $110.9 billion last year, which evens out at a daily average of approximately $304 million. That means Google could have been stung with penalties of as much as $15.2 million a day, on top of its existing $5 billion fine.
But on Tuesday, Google published a blog post announcing that it would be complying with the EU’s Android demands while it is in the process of appealing.
It said it would no longer require European phone manufacturers who use its Android operating system to pre-install Google apps. The downside for manufacturers is that they will now have to pay to pre-install apps such as Gmail or the Google Play Store.
The EU originally gave Google a deadline of October 28, and the company said the changes will come into effect on October 29. The move seems designed to avoid incurring further fines should Google lose its appeal against the EU.
Google is not entirely off the hook, however. A Commission spokeswoman told Business Insider: “It is Google’s responsibility to comply with its obligations under the decision. The Commission will closely monitor Google’s compliance to ensure that the remedy is effective and respects the Decision.”
The EU was also keen to emphasis that its decision did not stipulate that Google charge manufacturers to install its apps. “It is for Google to decide exactly how to comply with the Commission’s decision. The decision does not require Google to charge for any of its apps or for the Play Store,” the spokeswoman added.