Moment of truth for Google as record EU antitrust fine looms

Joanna Estrada
July 18, 2018

At issue are the rules Google binds phone makers to if they want to use the company's Android operating system, and how far European regulators might want to go in possibly forcing Google to level the playing field. The fine - likely to be handed down on Tuesday or Wednesday - is expected to eclipse the 2.1 billion pound monopoly abuse penalty Google paid previous year over its internet shopping business, and escalates the war between Silicon Valley and Brussels, The Telegraph reported on Saturday.

A person familiar with the matter told Reuters the meeting is now set for 17 July, without giving a reason for the change.

The European Commission's decision, delayed by a week by US President Donald Trump's visit to a North Atlantic Treaty Organisation summit in Brussels last week, is expected on Wednesday.

European regulators are expected to hit Google with a multibillion fine on Tuesday or Wednesday, an announcement that's being closely watched not because of the anticipated size of the penalty - Google basically prints money at this point, so it will be able to easily absorb the blow.

The Mountain View-based company's high payouts to app developers, coupled with its entrenched relationship with millions of advertisers, has turned Google into the main revenue source for many apps.

With Microsoft however increasingly building their platform on Android, the ability to offer competing services without losing access to the Google Play Store, for example, would be an ideal solution, allowing Microsoft for example to partner with OEMs such as Samsung to replace the Google Search bar with Bing and Google Mail with Outlook.

They also sign agreements not to sell devices on rival Android systems and also pay smartphone manufacturers to only pre-install Google Search on devices.

The EU sanction comes in the midst of a trade conflict between the United States and the EU, which has hit back against U.S. tariffs on European steel and aluminium by targeting £2.4bn ($3.2bn / €2.7bn) in American exports with higher duties.

The EU "will react firmly" to defend its interests against steep USA trade tariffs on steel and aluminium, the European Commission chief Jean-Claude Juncker said yesterday (1 March).

"Users in the European Union are now completely accustomed to using Google services and have come to prefer them", he said.

The commission has the power to fine Google up to 10 per cent of its parent company Alphabet's annual turnover, or 9.5 billion euro (8.4 billion pound). Google is too entrenched, he explains, a reference to realities like Android boasting a more than 75 percent market share in four of Europe's five biggest regions, according to Kantar Worldpanel.

Other reports by Click Lancashire

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