EU's fine on Google

Why in news?

The EU had slapped a record € 4.34-billion ($5.04 billion) antitrust fine on Google.

What is the reason?

How did Google do this?

Google imposed three types of restrictions on Android device manufacturers and network operators.
Pre-installation - Manufacturers were asked to preload the Google Search app and Chrome browser.
This was as a condition for licensing Google’s Play Store.
Pre-installation of the apps can create a status quo bias among the users.
Evidently, Google Search app is consistently used more on Android devices.
However, it is not the case with Windows Mobile devices where users must download it.

Incentives - Google offered financial incentives to large device manufacturers and network operators.
The condition was to exclusively pre-install Google Search across their entire portfolio of Android devices.
This significantly reduced their incentives to pre-install rival search apps.
However, EU said that by 2014, Google had stopped the practice.
Tweaked versions - Android is an open-source operating system.
It has its code published by Google online whenever a new version is released.
So based on this source code, developers like Android can create their own versions.
This could be done even without getting approval from Google.
So Google had not allowed the “forked” versions of Android to pre-install Google’s proprietary apps.
Google’s measure had thus prevented many manufacturers from developing and selling devices based on these tweaked versions.
E.g. Amazon’s Android fork called ‘Fire OS’
EU now insists that Google allow the forked versions of Android.

What are the earlier instances?

EU - Earlier, the EU fined Google €2.42 billion.
This was on charges of prioritising its own services on the search platform.
By this, Google gave itself an advantage over third-party service providers.
India - The Competition Commission of India had earlier fined Google Rs 136 crore.
It was slapped for its unfair business practices in the Indian online search market.
The National Company Law Appellate Tribunal (NCLAT) stayed the ruling on Google’s appeal.
Nevertheless, NCLAT asked it to pay 10% of the penalty. The tribunal will soon hear the matter.

What are the implications?

The recent penalty may not financially hurt Google with over $100 billion in cash reserves.
But it could bring about changes in the way the Android ecosystem functions.
It would set a precedent for other antitrust cases against Google.

Source: Indian Express