Google's 90 days to fix ‘illegal’ Android phones
GOOGLE'S chief executive has hit back at a record-breaking $6.8 billion fine issued by the European Commission overnight for what it claimed was illegal, anti-competitive behaviour in its smartphone software that had been designed to increase the search giant's dominance.
But boss Sundar Pichai said the regulators got it wrong, and vowed to appeal the verdict that could strip Google of two weeks' revenue and force it to change what apps are made available on popular phones including models from Samsung, Sony, Huawei, and LG.
In the second major fine issued to Google, the European Commission ruled it had broken antitrust laws by forcing phone makers to install Google's Chrome web browser, by paying manufacturers to install Google Search on handsets, and by preventing them from using alternative versions of Android software.
"In this way, Google has used Android as a vehicle to cement the dominance of its search engine," Commissioner Margrethe Vestager said.
"These practices have denied rivals the chance to innovate and compete on the merits. They have denied European consumers the benefits of effective competition in the important mobile sphere. This is illegal under EU antitrust rules."
The record-breaking fine followed a $3.4 billion fine in September last year over its shopping comparison service that the European Commission allegedly restricted competition.
But Google CEO Sundar Pichai said the tech giant would appeal the latest fine, as it did the last one, and pointed a finger at its rival Apple, saying the European Commission ignored "the fact that Android phones compete with iOS phones".
"We are concerned that today's decision will upset the careful balance we have struck with Android and that it sends a troubling signal in favour of proprietary systems over open platforms," Mr Pichai said in a blog post.
Apple, which installs its own closed operating system on iPhones, also pre-installs its own apps on handsets, but does not operate a search engine.
Google's Android software currently runs 80 per cent of the world's smartphones, according to Strategy Analytics, and the software on many of those phones may change following the verdict.
The European regulators have given Google 90 days to change anti-competitive practices or seek a delay with the courts.
Despite the massive fine, RBC Capital Markets technology analyst Mark Mahaney said it shouldn't dint the company's profits much, as it simply had so much money in reserve.
"Google has $US105 billion $A141 billion in net cash on its balance sheet, so after this fine Google will have $US100 billion $A134 billion. That's a lot," he said.
"Even if the appeal is unsuccessful, we do not believe the unbundling of Chrome, Google Search, and the Android app store from Android OS will materially affect, effect Google's core business."