The European Commission fined Google at 4.32 billion euros (about 5 billion US dollars) for violating antitrust laws. The Commission’s decision says that the US company uses the dominant position of Android in the mobile OS market to promote its own search engine and Chrome browser. Sundar Pichai, Google CEO, already spoke on this topic and said that the situation could affect the business model of Android.
Experts of the European Commission believe that Google enjoys leadership in the mobile operating system market not only to promote its search service and the browser Chrome, but also to influence the major manufacturers of smartphones. It is reported that the corporation limits other companies in the release of devices on their own versions of Android. Moreover, Google allegedly pays large manufacturers and mobile operators for presetting their applications on smartphones instead of competitors’ services.
Now Google is obliged to pay a fine and within 90 days to comply with the requirements of the European Commission. If the company does not do this, then it faces a penalty in the amount of 5% of the total revenue.
“If mobile phone manufacturers and mobile operators can not incorporate our applications on their wide range of devices, this will disrupt the balance of the Android ecosystem. The existing business model of the OS allowed us to not charge fees for its use from device manufacturers and not depend on the controlled distribution model. We are concerned that today’s decision will violate the careful balance that we created with Android. It also gives an alarm signal in favor of closed systems, rather than open platforms, “said Sundar Pichai, head of Google.
He also recalled that with Android, they already offer freedom of choice both to producers and users, but this fact was not taken into account in the European Commission.
“This decision ignores the fact that Android smartphones are competing with iOS devices, which is confirmed by 89% of the Commission’s market survey. It also misses what choice Android provides to thousands of handset manufacturers and mobile operators that create and sell Android gadgets; millions of application developers around the world who have created their own business with Android, and billions of consumers who can now afford and use the latest Android smartphones, “said Sundar Pichai.
According to the head of Google, the decision of the European Commission can affect the business model of Android. Since the launch, Google has been developing and distributing Android completely for free, requiring device manufacturers and operators only to install their own services. Google’s main earnings are for the display of advertising, and the demand of the European Commission deprives it of this opportunity. As a result, the company will have to look for new ways to monetize Android, one of which may be the introduction of a license for manufacturers, which will also affect the final cost of devices for users.