Tech

Google hit with record-breaking fine amid Android controversy

Google has been slapped with a record €4.3bn (£3.8bn) fine over claims that the tech giant abused its dominance in the mobile operating systems market.

The penalty, which relates to Googles "illegal practices" in making its search engine the default on the majority of Android mobiles, was announced at midday today by Margrethe Vestager, the EU's commissioner for competition.

It is the largest fine imposed by the EU regulator against a single firm, after a three-year investigation into Google following a complaint by lobbying group Fairsearch in 2015.

Read more: Google's record $11bn fine over Android market dominance set for Tuesday

According to the commission, "Google has imposed illegal restrictions on Android device manufacturers and mobile network operators to cement its dominant position in general internet search."

Google has said it will appeal the commission's decision, saying: "Android has created more choice for everyone, not less. A vibrant ecosystem, rapid innovation, and lower prices are classic hallmarks of robust competition."

The penalty has come just over a year after the Brussels watchdog handed down a €2.4bn fine to Google for favouring its shopping service over rivals in a ruling that the Silicon Valley firm is currently appealing.

This latest move will be seen as one of the most significant decision taken by the EU commission in its eight-year antitrust dispute with the US tech giant.

Read more: Newspapers unite their digital advertising to topple Facebook and Google

Vestager said: "Today, mobile internet makes up more than half of global internet traffic. It has changed the lives of millions of Europeans. Our case is about three types of restrictions that Google has imposed on Android device manufacturers and network operators to ensure that traffic on Android devices goes to the Google search engine. In this way, Google has used Android as a vehicle to cement the dominance of its search engine.

Vestager added: "These practices have denied rivals the chance to innovate and compete on the merits. They have denied European consumers the benefits of effective competition in the important mobile sphere. This is illegal under EU antitrust rules."

In particular, the commission makes three allegations.

Firstly, that Google has required manufacturers to pre-install the Google Search app and browser app (Chrome), as a condition for licensing Google's app store (the Play Store).

Secondly, that Google has made payments to certain large manufacturers and mobile network operators on condition that they exclusively pre-installed the Google Search app on their devices.

Thirdly, the commission alleges that Google has prevented manufacturers wishing to pre-install Google apps from selling even a single smart mobile device running on alternative versions of Android that were not approved by Google (so-called "Android forks").

Android is seen as a key part of Googles future profit base, with more users relying on mobile gadgets for search services and Android being used in more than four in every five of the worlds smartphones.

What's next?

Google is set to challenge the record-breaking fine, having already announced that it will also be appealing a previous €2.4bn fine from last year over allegations that its shopping service was favoured over rivals.

A third case also stands against the company from 2016, in which the EU has accused the firm of preventing third parties using its Adsense product from displaying search advertisements from Googles competitors .

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