EU fines Google a record $5 billion over mobile system, Mountain View company vows to appeal

BRUSSELS (AP/KTVU) - The European Union's antitrust chief has fined Google a record $5 billion for abusing the market dominance of its Android mobile phone operating system.

EU Competition Commissioner Margrethe Vestager said Wednesday that Google went against EU rules when it required mobile phone producers to pre-install the Google Search and browser apps as a condition for licensing Google's app store. She said Google also paid big producers to exclusively pre-install the Google Search app.

Vestager said that "companies must compete on their merits," playing by antitrust rules that favor consumers and open markets, and not restrict competition.

The European Union hit tech giant Google in its sizeable corporate wallet, levying a fine equal to 40% of its 2017 profits. It takes a lot to stun a tech giant such as Google. But that’s exactly what the European Union did Wednesday.

“Google has engaged in illegal practices to cement its dominant market position in internet search,” said Margrethe Vestager of the European Commission in Charge of Competition.

Google said that instead of restricting competition, it did the opposite.

"Android has created more choice for everyone, not less," Google spokesman Al Verney said. "A vibrant ecosystem, rapid innovation and lower prices are classic hallmarks of robust competition."

"We will appeal the Commission's decision," he added.

And in a blog post, CEO Sundar Pichai added: "Today, the European Commission issued a competition decision against Android, and its business model. The decision ignores the fact that Android phones compete with iOS phones, something that 89 percent of respondents to the Commission’s own market survey confirmed. It also misses just how much choice Android provides to thousands of phone makers and mobile network operators who build and sell Android devices; to millions of app developers around the world who have built their businesses with Android; and billions of consumers who can now afford and use cutting-edge Android smartphones "

The EU's fine is the biggest ever imposed on a company for anticompetitive behavior.

Wednesday's ruling caps an investigation that goes back at least three years. Regulators came out with a preliminary ruling in April 2016 in which they said Google had market shares exceeding 90 percent in most European countries in the realm of licensable mobile operating systems, and abused that share by forcing manufacturers to take its apps and by preventing them from selling altered versions of Android, which is technically open-source software.

In June 2017, regulators already fined Google 2.42 billion euros ($2.8 billion) for favoring its shopping listings in search results.