When your business is big, your products or services are used by almost everybody, and you heavily take advantage of that fact, you run the risk of being charged with breaking the antitrust law, as you have made it difficult, even impossible, for other companies offering the same goods and services to compete with you. The tech giant Google is known for many things today, but at its core is famous for its powerful internet search engine, which has taken the place of former juggernauts like Yahoo! It is this fact that is the crux of an antitrust suit filed against them by European regulators, which at the latest has cost Google a hefty fine.
TechCrunch reports that Google has been slapped with a new penalty by the competition commission of the European Union for what has been perceived as severely anti-competitive business practices. The fine incurred amounts to €4.34 billion, or $5 billion. EU competition commissioner Margrethe Vestager explained how Google made several restrictions on their Android mobile operating system that were deemed in violation of antitrust laws, in doing so denying its business competitors an even playing field.
The sticking point of the litigation concerns the Android OS, developed by Google for mobile devices as an open alternative to the proprietary iOS of Apple’s iPhones. Vestager points out that all internet searches on Android are routed through the Google search engine. In fact, Google apparently required smartphone manufacturers that wish to operate on Android, to package Google search and the Chrome browser with their devices by default, in order to license the Google Play app store library. In doing so, other search engines and browsers have been neglected.
This situation according to The Verge actually calls to mind a rather similar incident two decades ago. In 1998 Microsoft was also under a similar antitrust probe regarding how its Internet Explorer browser was made a prerequisite bundle with the Windows OS, minimizing the need for alternatives like Netscape Navigator.
To the charges of antitrust violations and the multi-billion-dollar fine from the EU, Google rebuts that rather than restrict the choices for consumers using Android smartphones, they actually have more. CEO Sundar Pichai points out that the Android OS only made it possible for smartphones from different makers to run the same applications on its platform, and that manufacturers actually have the liberty to modify their defaults, even uninstall Chrome.
Image courtesy of Reuters