Friday 14 December 2018

Record €4bn EU fine won't dent Google's $100bn cash reserves

Google CEO Sundar Pichai said the fine ‘sends a troubling signal in favour of proprietary systems’
Google CEO Sundar Pichai said the fine ‘sends a troubling signal in favour of proprietary systems’

Foo Yun Chee

EU antitrust regulators have hit Google with a record €4.34bn fine for using its Android mobile operating system to squeeze out rivals.

Google said it would appeal the fine which is nearly double the €2.4bn the US tech giant was ordered to pay last year over its online shopping search service.

European Competition Commissioner Margrethe Vestager. Photo: Reuters
European Competition Commissioner Margrethe Vestager. Photo: Reuters

It represents just over two weeks of revenue for Google parent Alphabet and would scarcely dent its cash reserves of $102.9bn. But it could add to a brewing trade war between Brussels and Washington.

The EU antitrust chief said she very much liked the United States, countering a reported remark by President Donald Trump that she "hated" the country.

"But the fact is that this has nothing to do with how I feel. Nothing whatsoever. Just as enforcing competition law, we do it in the world, but we do not do it in political context," she said.

"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 favour of proprietary systems over open platforms," Google CEO Sundar Pichai said in a blog.

Ms Vestager's boss, Commission President Jean-Claude Juncker, is due to meet President Trump at the White House next Wednesday in an effort to avert threatened new tariffs on EU cars amid Trump's complaints over the US trade deficit.

Ms Vestager also ordered Google to halt anti-competitive practices in contractual deals with smartphone makers and telecoms providers within 90 days or face additional penalties of up to 5pc of parent Alphabet's average daily worldwide turnover.

"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," Vestager said.

Asked whether breaking up Google would solve the issue, a call made by a number of Google foes, she said she was not sure if that was the solution.

"I don't know if it will serve the purpose of more competition to have Google broken up. What would serve competition is to have more players," Ms Vestager told a news conference.

She also defended the lengthy investigation which critics say means regulatory action lags behind market developments, saying regulators would never compromise on due process. (Reuters)

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