EU Fines Google 5 Billion For Trust Violations

Due to recent legal events, Google has been smacked with a record 4.3 billion euro ($5 billion) fine due to the violation of antitrust laws, according to European Union regulators.

According to the European Union, Google has been abusing its market dominance with the Andriod OS in three ways:

1. All devices that run on the Andriod OS always come bundled with chrome apps, which increase the likelihood that any user who buys a device running the Android OS will use Google’s Chrome apps, which directly benefits Google.
2. Google has blocked phone makers from making devices that run “forked” versions of Android, or alternate versions of the OS with key differences, for example, a version that does not come bundled with the Chrome apps.
3. According to the European Commission, Google has “made payments to certain large manufacturers and mobile network operators” to bundle only the Google search app on handsets.

The decision will force Google to cease all of these violations within 90 days of the decision, which was made today, on July 18th. That means Google has 90 days from today to make all fresh versions of Android no longer come installed with Chrome, remove all measures to counter manufactures from creating “forked” versions and end exclusivity deals with manufacturers relating to the packaging of apps. That’s a very short amount of time for a massive industry such as Google.

In an interview with The Verge, Google says it will appeal this decision. However, large appeals such as this one that involves massive company bodies can often devolve into back-and-forth conflicts that go on for years at a time. In the same interview, Google also warned The Verge that this decision could affect the free business model of Android in the future.

This was discussed further in a blog post by Google CEO Sundar Pichai, where the CEO defended Google’s position in the OS war. Pichai underlines the fact that although the chrome apps come installed with the OS by default, other users can still easily remove said apps, and the average user will install around 50 apps during the time they own their Android device.

Pichai continues to state that the “delocate ecosystem” that Google has constructed when it comes to the Android OS relies on the devices coming pre-packaged with the Google apps, and that the company has been able to justify keeping the OS free for everyone due to the apps that come included.

“But we are concerned that today’s decision will upset the careful balance that we have struck with Android, and that it sends a troubling signal in favor of proprietary systems over open platforms.”

Due to this blog post making no hard statements about the actions that will be taken by the company, this blog post feels more like a warning or a threat than a legitimately concerned CEO. The CEO poses the idea, a thought that would devastate a number of companies which rely on the free Andriod OS to operate their systems, and allows it to float in the tense airs that have followed the EU’s antitrust decision. The possibility is posed as a “what if” situation that paints a reality where Google is not allowed to package their apps with the Android OS as a very unfavorable one for many individuals and smaller companies.

The power Google holds in this situation is scary. Although this blog post could easily be the words of a CEO who wants to warn consumers about the possible effects of the EU’s decision, there is a hint of blackmail to it, a possibility for it to be interpreted as a “undo the decision or else” kind of statement. Google holds a lot of economic power in this situation, and could reasonably justify the decision to begin charging for the Android OS if no longer packaging it from Chrome is as large of an issue as they claim it to be.

Featured Image Via Flickr / srslyguys