The European Commission levied the fine Wednesday, decrying the Alphabet-owned company's tactics in forcing the manufacturers of Android smartphones to preinstall Google's own search services and Chrome browser, to give them preference over rival services. Google raked in around 25 billion euros in digital advertising in Europe in 2017, equity research firm Pivotal Research estimates.
He said the decision made by Margrethe Vestager, the European Commission's competition commissioner, risks upending the Android model. She said that European Union antitrust laws put a "special responsibility" on dominant businesses, meaning they can not deny other companies the chance "to compete with them on merit".
But Google also plans to appeal the ruling, which could draw out the process for months or even years.
Today, about 80% of smart mobile devices in Europe, and worldwide, run on Android.
Vestager said that manufacturers were effectively restricted from creating forks of Android thanks to the fact that Google required such manufacturers to enter into obstructive contracts if they also wanted to make use of proprietary Android apps and services. "We intend to appeal", Pichai said.
The Commission's argument is largely predicated on contracts Google has with manufacturers to ensure Google apps and services come preinstalled on Android devices.
Google has been ordered to end illegal restrictions on Android smartphone makers and mobile network operators within 90 days or face further fines of up to 5% of its daily turnover.
Google has used Android as a vehicle to cement its dominance as a search engine.
Google has prevented device manufacturers from using any alternative version of Android that was not approved by Google (Android forks). The ecosystem carries all the properties needed for a fair competition - "rapid innovation and lower prices". "Our concern is that by requiring phone makers and operators to pre-load a set of Google apps, rather than letting them decide for themselves which apps to load, Google might have cut off one of the main ways that new apps can reach customers". The company also says the allegation that it stymied competing apps is false because manufacturers typically install many rival apps on Android devices-and consumers can download others. "This harmed competition by significantly reducing their incentives to pre-install competing search apps". It said that "at a minimum", Google has to stop and to not re-engage in any of the three types of practices. Also true. What he doesn't address is how not agreeing (and thereby missing out on the Google payout and losing the right to install the Play Store) might affect that manufacturer's business.