The European Commission announced a 4.34 euro (~$5 billion) fine against Google as a conclusion to its antitrust investigation into the company's abuse of Android's dominance in the smartphone market.
Under EU rules Google could have been fined up to 10 per cent of parent company Alphabet's annual revenue, which hit $110.9 billion in 2017.
The EU's antitrust regulator began a probe into whether Google had abused dominance of the Android operating system to promote its own mobile apps and services including the company's search engine.
During the investigation, device manufacturers told the Commission that the Google Play Store is a "must-have" app, which consumers expect to have pre-installed, especially since they can not lawfully install it themselves.
The Commission said Google also made payments to some large manufacturers and mobile network operators on the condition that they exclusively pre-installed the Google Search app on their devices. She said that European Union antitrust laws put a "special responsibility" on dominant businesses, meaning they can not deny other companies the chance "to compete with them on merit".
It's the biggest antitrust fine ever given by Europe's competition regulator against a single firm, and cements competition commissioner Margrethe Vestager's reputation as Silicon Valley's policewoman. "Android has created more choice for everyone, not less", Google spokesman Al Verney said. The company said it would appeal the commission's decision.
European Union regulators have taken a much more adversarial approach to big tech companies than their U.S. counterparts, especially when it comes to competition, data protection and tax issues.
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The record-setting fine almost doubles the €2.4 billion ($2.8 billion) penalty levied against Google a year ago for pushing its own shopping results to the top of search pages.
Google is the dominant force in mobile operating systems in Europe and overseas.
He also points out that manufactures don't have to agree to pre-install Google's apps.
European officials have been investigating Android since 2015 after FairSearch filed a complaint against Google in 2013. In this way, Google has used Android as a vehicle to cement the dominance of its search engine.
"So far, the Android business model has meant that we haven't had to charge phone makers for our technology, or depend on a tightly controlled distribution model", Pichai wrote. A vibrant ecosystem, rapid innovations and lower prices are classic hallmarks of robust competition. "This harmed competition by significantly reducing their incentives to pre-install competing search apps", the EC said, but noted this practice ended in 2014.
Google's bundling of search, chrome and Play and pre-installations are illegal, harmful and must now stop.
Its Play Store accounts for more than 90% of apps downloaded on Android devices in Europe.