Google Slammed With Massive Fine

The European Commission has fined Google €4.34 billion for violating European competition rules.

The company now has 90 days to change its business practices. If it fails to, it will accrue an additional fine of up to 5 percent of its parent company, Alphabet’s, daily turnover. The current charge is nearly double the fine which was imposed on Google in 2017, for denying rivals access to price-comparing websites. Google's current net worth is estimated at $103 billion USD.

The ruling is based on a determination by EU Competition Commissioner, Margrethe Vestager, that Google have been involved in three enormously serious, systematic, violations of EU rules. These are as follows:

- In order to license Google’s app store, Play Store, Android manufacturers were required to pre-install the Google Search app and Chrome app.

- Bribing phone makers and mobile networks to exclusively pre-install the Google Search app.

- Barring manufacturers from building alternative Android devices that were not approved by Google.

As a result of these restrictions, the European Commission has decided, Google unfairly drove internet traffic to their own servers. In effect, these are anti-competitive practices, in which Google is abusing a dominant position – in fact virtually a monopoly position – in the market.

This ruling against Google could potentially disrupt the company's business model, which relies its services being used to disseminate advertisements and sell products.

The commission hope that the ruling – and in particular the requirement to change Google's business practices – will provide an opportunity for other companies to compete as potential default browsers. The ruling will also be welcomed by rival search engine providers.

Of course, consumers could still opt to download Google's software. For its part, Google argues that consumers can still download other apps if they desire.

However, the Competition Commissioner, Margrethe Vestager, has pointed out that 80 percent of all mobile phones are run on Android software and 90 percent of European consumers utilise Google’s search engines. By confining companies to strict contracts, in order to use their services, the commission insists that Google is abusing its dominant position.

Google has said that it will appeal the decision.