The European Union imposed a record breaking $5.1 billion fine on Google Wednesday, alleging the tech giant violated anti-trust law by bundling its search and web browsing tools with the Android operating system that runs on smartphones and tablets.
Margrethe Vestager, the European Union’s competition chief, ordered Google to stop requiring phone manufacturers to preload their devices with Google’s search engine and Chrome web browser in exchange for providing consumers access to the Android App Store. Vestager wrote that Google uses the approach, which gives the company access to Android users data, 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,” Vestager said in a statement.
Google must “bring its illegal conduct to an end” within 90 days or risk additional fines of up to 5 percent of its daily global turnover, Vestager told reporters at a press conference in Brussels Wednesday.
Google immediately vowed to appeal the decision in a Wednesday statement. “Android has created more choice for everyone, not less,” said Google spokesman Al Verney. “A vibrant ecosystem, rapid innovation and lower prices are classic hallmarks of robust competition.”
The latest sanction comes after European regulators fined Google $2.7 billion in 2017 for prioritizing its shopping-comparison service in users’ search results over third parties.
U.S. regulators have been significantly more reserved in their approach, exploring the possibility of breaking up the massive firm in 2013 before ultimately deciding against it. However, there is a growing appetite for increased regulation among many congressional Democrats and a number of Republicans.
Google shares dropped .4 percent in premarket trading on news of the fine. The share of Google’s revenue resulting from advertising has been steadily increasing in recent years but the trend may recede as the number of mobile users exposed to the search platform due to their choice of phone will presumably decrease.