Google faces multibillion EU fine over Android

Google is expected to announce a multibillion-euro fine from the European Union on Wednesday, accused of abusing its market dominance with its Android mobile operating system.

The ruling was due earlier this month, but was delayed because of US President Donald Trump’s visit to Europe.

The European Commission has already said it believes the American tech giant is in breach of EU antitrust rules by imposing restrictions on manufacturers. A statement in April 2016 said Google’s strategy in obliging devices to set its search engine as the default service penalised rivals and stifled competition. Google denies wrongdoing.

The company is appealing against a decision last year by the Commission to fine Google €2.4 billion for favouring its shopping service over those of competitors. It’s thought the new EU penalty could be even larger.

The Android decision is the most important of three EU antitrust cases against Google, pursued by Competition Commissioner Margrethe Vestager. Android is by far the world’s most popular smartphone operating system, and Google has become the main revenue source for many apps.

Because of Google’s entrenched position, it’s thought that EU antitrust regulators face an uphill struggle to level the playing field for its rivals by ensuring that users can download from competing app stores and that smartphone makers are free to choose pre-installed apps.

Competition Commissioner Margrethe Vestager began her antitrust action against Google in 2015 alleging the internet giant was in breach of EU antitrust rules and abused its dominant position by imposing restrictions on Android device manufacturers and mobile network operators.

Regulators say Google has forced smartphone makers to pre-install Google Search together with its Play Store and Chrome browser, sign agreements not to sell devices on rival Android systems, and also pay smartphone makers to pre-install only Google Search on devices.

For its part Google has denied it has abused this dominant position or suggestions that it is guilty of any wrongdoing.

Various reports suggest the fine that the EU could level against the Alphabet subsidiary could outstrip the €2.4bn charge imposed last year for allegedly favouring its own site in comparison shopping searches. Google is appealing the latter fine.

If Brussels decides to use the full extent of its powers it could hit Google with a fine that equals 10pc of its global turnover or around €9.8bn.

Vestager could also force Google to unbundle Chrome or Google Play services from Android installs which she sees as Google illegally “tying” these apps to smartphones.

She has alleged that mobile operators and device manufacturers were given financial incentives if they installed Google search and no other rival services.

Another aspect to the case relates to contractual restrictions that stopped manufacturers from selling phones with rival operating systems developed on Android open source code.

In a separate query Vestager’s investigators are probing Google’s AdSense advertising business.

Crucially, the European Commission believes that these practices combined served to undermine the ability of rival browsers to compete with Google’s Chrome browser and obstructed the emergence of other operating systems.