TechTheDay

The European Commission has fined Google €4.34 billion in an antitrust case. The EC has ruled that Google committed a breach of EU’s antitrust rules since 2011 when the company has imposed illegal restrictions on phone makers that use the Android OS for their devices. Android is, of course, a Google product and is free for everyone to use. However, that comes with a price: Google is using this to dominate general Internet search for products and services. Google forces manufacturers to agree that Android phones that come equipped with Google Play must also have Google Search and Chrome. They also have been restricting manufacturers from using alternative Android versions that aren’t approved of by Google if the manufacturers wish to pre-install Google apps in their phones. Google also pays these manufacturers to agree with all of the rules above.

Google’s Power

This dominance of the market has been the bread and butter of Google’s power. Google makes most of its money with the Google Search Engine so these restrictions to manufacturers by Google is to ensure that people would use only Google products and services. When Apple released the iPhone along with the iOS, Google knew that smartphones would dominate the market, hence the Android OS and all the restrictions in using it.

Of course, the EU saw it as a breach in its antitrust laws. Commissioner in charge of competition policy, Margrethe Vestager, said in a statement:

“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. 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.”

Sunder Pichai, Google CE, fired back with his own statement:

“Today’s decision rejects the business model that supports Android, which has created more choice for everyone, not less.”

The EU, with the statement they released, also demands that Google stops such practices “in an effective manner within 90 days of the decision.” They also demand that Google would refrain from repeating such practices, though they, Google, is allowed to find an alternative that’s “reasonable, fair and objective”

Consequences

One “alternative” that people in the tech industry is thinking of is to make people pay for the Android OS. Sundar Pichai, in his statement, said that the Android business model was meant so that developers using Android doesn’t have to pay Google anything. Mentioning this seems to hint that if Google changes their current business model, then developers could end up starting to pay for the Android OS.

Of course, should this actually happen, it would likely be the consumers who would end up footing the bill. Though how much will be added to phone prices is still uncertain at this time.

Criticism

The EU drew a lot of criticism because of this decision, some calling this “a very European, first world problem.” Consumer Technology Association President, Gary Shapiro, has called the ruling an “innovation tax.” Donald Trump also posted on Twitter that the EU is trying to take advantage of the US and seems to hint that he will do something about it. If anyone has been following Trump’s actions concerning the US’ tech industry as well as his actions in politics and dealing with foreign entities, they’ll tell you that a Trump-style retaliation is very certain.

Does Google deserve this ruling? Many people may argue that buying out the market and their rivals is a valid tactic in business, but such practices that lead to monopoly is always frowned down upon, especially when this leads to the halt of innovation.