Friday, 20 July 2018

Record fine for Google for breaching EU antitrust rules: is there anything for consumers?


Earlier this week, on the 18th of July, the European Commission fined Google €4.34 billion for breaching EU antitrust rules. This is so far the largest fine ever imposed for such violations.

It is now evident that since 2011 Google imposed illegal restrictions on other Android device manufacturers and mobile network operators abusing their dominant position on the markets of: general internet search serviceslicensable smart mobile operating systems and app stores for the Android mobile operating system.

In particular Google 1) required manufacturers to pre-install the Google Search app and browser app (Chrome), as a condition for licensing Google's app store (the Play Store), engaging in the so called illegal practice of ‘tying’: 2) made illegal payments to certain large manufacturers and mobile network operators on condition that they exclusively pre-installed the Google Search app on their devices; and 3) illegally prevented manufacturers wishing to pre-install Google apps from selling even a single smart mobile device running on alternative versions of Android that were not approved by Google. Google's conduct prevented a number of large manufacturers from developing and selling devices based on Amazon's Android fork called "Fire OS".

The antitrust decision requires Google to bring its illegal conduct to an end in within 90 days of the decision. At a minimum, Google has to stop any of the above three types of illegal practices. The decision also requires Google to refrain from any measure that has the same or an equivalent object or effect as these practices. The Commission will monitor compliance with the decision, and in the event of failure to comply, Google can face payment of a fine of up to 5% of its average daily worldwide turnover.

This decision is beneficial for consumers in two ways. First, by stopping the abuse of dominant position, the decision is likely to result in increased competition in the given markets that brings better products and lower prices for consumers. Second, harmed consumers are able to claim compensation in civil actions for damages in their national courts based on the new EU Antitrust Damages Directive.

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