European Union’s General Court upholds punishing antitrust ruling against Google over its Android operating system
Alphabet and its Google division has been hit with sobering news on Wednesday, after a significant legal setback.
Europe’s second-highest court (the General Court) has ‘largely confirmed‘ the European Commission’s decision that “Google imposed unlawful restrictions on manufacturers of Android mobile devices and mobile network operators in order to consolidate the dominant position of its search engine.”
However it should be noted that the European Commission does not win every ruling. Earlier this week the EC confirmed it would not appeal a June court decision that quashed its 997 million euro ($997m, £851m) antitrust fine against Qualcomm.
Google has been stung by a series of European Commission antitrust fines over the past five years.
In 2017 the European Commission fined Google 2.4bn euros after it ruled that Google had thwarted rivals of shopping comparison websites.
Then in July 2018 the European Commission fined Google 4.3 billion euros, the largest fine ever imposed by a competition authority in Europe, for commercial practices related to its Android mobile operating system, after an investigation that had begun back in 2015.
The EC said the move was aimed at preventing competition, and was necessary for Android to seize market share from Apple.
And then in March 2019 European antitrust regulators fined Google 1.49bn euros concerning the firm’s AdSense advertising service.
In September 2021 Google began a week long appeal against the record-breaking 4.3bn euros antitrust fine, in an effort to dismiss the matter.
On Wednesday, the General Court made its ruling over the payments Google made to phone makers to only pre-install Google Search on their devices.
However it slightly lowered the amount Google will have to pay.
The General Court noted that the Commission had fined Google in 2018 for having abused its dominant position by imposing anticompetitive contractual restrictions on manufacturers of mobile devices and on mobile network operators, in some cases since 1 January 2011.
The EC at the time identified three types of restrictions:
- those contained in ‘distribution agreements’, requiring manufacturers of mobile devices to pre-install the general search (Google Search) and (Chrome) browser apps in order to be able to obtain a licence from Google to use its app store (Play Store);
- those contained in ‘anti-fragmentation agreements’, under which the operating licences necessary for the pre-installation of the Google Search and Play Store apps could be obtained by mobile device manufacturers only if they undertook not to sell devices running versions of the Android operating system not approved by Google;
- those contained in ‘revenue share agreements’, under which the grant of a share of Google’s advertising revenue to the manufacturers of mobile devices and the mobile network operators concerned was subject to their undertaking not to pre-install a competing general search service on a predefined portfolio of devices.
“On the basis of its own assessment of all the circumstances relating to the penalty, the General Court rules that it is appropriate to vary the contested decision, concluding that the amount of the fine to be imposed on Google for the infringement committed is to be €4.125 billion,” the General Court ruled.
“To that end, the General Court considers it appropriate, as did the Commission, to take account of the intentional nature of the implementation of the unlawful practices and of the value of relevant sales made by Google in the last year of its full participation in the infringement,” the court ruled.
It is not clear whether Google intends to appeal this ruling.
An appeal, limited to points of law only, may be brought before the Court of Justice against the decision of the General Court within two months and ten days of notification of the decision.
Google did however state it was disappointed in the ruling.
In a statement provided to CNBC, Google said, “We are disappointed that the Court did not annul the decision in full.”
“Android has created more choice for everyone, not less, and supports thousands of successful businesses in Europe and around the world,” it reportedly said.