The European Union hit Google with a $5.06 billion antitrust fine. That’s the largest such fine on record and is the second time that the EU has gone after the American company. Last time, the company faced a $2.8 billion fine for promoting its own services in its Internet search results.
So, what exactly is Google in trouble for this time?
According to Margrethe Vestager, the EU’s antitrust chief, “Google has used Android as a vehicle to cement the dominance of its search engine.” Specifically, Google is accused of three violations: requiring the pre-installation of Google Search and browser app Chrome as a condition for licensing Google’s app store, paying manufacturers and mobile network operators to pre-install Google apps on devices, and preventing the sale of smartphones that ran unapproved versions of Android software.
Although the EU has given Google 90 days to comply or face additional penalties, Google has already announced that it would appeal the decision. (Google also is still in the process of appealing the previous fine levied against it).
Importantly, the EU’s penalty goes beyond the hefty fine — it compels Google to allow smartphone manufacturers to pre-install non-Google software and make it easier for smart phone users to access non-Google products. That means that Google, which captures a large part of the market based on software pre-installed on devices, would likely lose some of that dominance.
Google’s Android, of course, dominates not just in the EU but also in the U.S. So why is the company being attacked on one side of the Atlantic and not the other?
The answer has a lot to do with difference in approaches to antitrust law. In America, antitrust law hinges on hurting consumers particularly through higher prices. In the EU, antitrust isn’t so much about money but ideas. Regardless of the price consumers pay, if a company is hurting the introduction of new ideas and innovation, then that is seen as a monopoly.
It is on exactly this logic that Google was first investigated and was fined — now for a second time. Google, of course, disputes this, arguing that “Android has created more choice for everyone, not less. A vibrant ecosystem, rapid innovation, and lower prices are classic hallmarks of robust competition.” Google also released an open letter emphasizing these points and that, contrary to the reasoning used by the EU, Android competes with Apple’s iOS.
A second reason, although EU regulators would never admit it, is that Google is an American company. Especially with Trump’s ongoing trade war, which will likely negatively impact the EU, it would not be unreasonable for regulators to see dominant American companies as good targets.
Google’s record-setting reprimand is, of course, just the latest act in an ongoing and messy debate of how tech companies and the Internet should be regulated and by who. With tech giants like Facebook facing criticism in the U.S. over unfairly filtering content and ongoing EU targeting of “monopolies” and data privacy in European markets even as companies evolve and develop new technology unanticipated by existing laws, the internet remains the landscape of fierce debate.
How technology develops, however, will likely depend less on court rulings or fines than on the choices users make. Cases take time to investigate and then litigate, meaning that decisions often apply to technology that has already further developed, leaving users to decide how and where development occurs.
