Google faces $5-billion record anti-trust penalty by EU over Android apps

Google will be fined around 4.3 billion euros ($5 billion) by the European Union over Android apps on Wednesday, setting a new record for antitrust penalties, according to a person familiar with the EU decision.

The fine, to be announced about midday on Wednesday, ends an EU probe into Google’s contracts with smartphone manufacturers and telecoms operators. Google Chief Executive Officer Sundar Pichai had a call with EU Competition Commissioner Margrethe Vestager late Tuesday for a so-called state of play meeting, a usual step to alert companies of an impending penalty, according to one of the people, who asked not to be named because the discussion is private.
 

EU commissioners are due to discuss an antitrust probe on Wednesday morning, according to an online agenda.
 

The European Commission fine will exceed last year’s then-record 2.4 billion-euro penalty following an investigation into Google’s shopping search service. Google owner Alphabet Inc. and the commission both declined to comment on the Android fines.

Levies are based on revenue in the market being probed and can’t exceed 10 per cent of a company’s global annual revenue. Google raked in around 25 billion euros in digital advertising in Europe in 2017, equity research firm Pivotal Research estimates.
 

More significant than a blockbuster fine could be an accompanying order freeing up phone manufacturers to choose non-Google apps to install on Android phones. That would yield crucial real estate for app developers given that about 80 percent of smart mobile devices use Android.
 

EU officials have been investigating Google contracts that require manufacturers of Android phones to take Google’s search and browser apps and other Google services when they want to license the Play app store. National competition authorities met earlier Tuesday to agree on the fine, one person said.
 

The EU is also targeting Google’s payments to telecoms operators and manufacturers who exclusively install Google search on devices and contracts that prevent handset makers selling phones using other versions of Android.
 

Google has a market share of more than 90 percent for general Internet search, licensed smart mobile operating systems and app stores for Android software, the EU said in 2016.