Google is bracing itself for what will likely be a record-breaking EU fine in the coming weeks. The Financial Times reports that the EU antitrust investigation into Android is concluding, and a fine is expected to be announced in July. The European Commission has been investigating Android after rivals complained that Google has been abusing its market dominance in software than runs on smartphones.
Google has been accused of limiting access to the Google Play Store unless phone makers also bundle Google search and Chrome apps, a practice that may have breached EU antitrust rules. Google has also reportedly blocked phone makers from creating devices that run forked versions of Android, as part of an anti-fragmentation agreement.
A fine is reportedly expected next month, but it’s not clear how big it will be. The EU could fine Google up to $11 billion, 10 percent of Alphabet’s (Google’s parent company) annual turnover. It’s unlikely that Google will be fined the full $11 billion, but anything over $2.7 billion would set a new record. Google was previously hit with a record-breaking $2.7 billion fine last year by the European Commission for breaking antitrust laws. The EU accused Google of demoting rivals and unfairly promoting its own services in search results related to shopping.
Google’s previous fine didn’t lead to any significant changes to its business, but the Android case could be very different. Google has been accused of bundling its search engine with Android, and the European Commission could force the company to make changes to this practice. Google could face its own Microsoft moment, with years of monitoring to ensure the company is compliant with any changes imposed by the EU.
Microsoft had a similar fight with the EU more than 10 years ago. Microsoft was accused of bundling its Windows Media Player with Windows, and the EU forced it to unbundle the app so that competitors could get a fair advantage. Microsoft created a special version of Windows for Europe without the app, but it was the EU’s next ruling that really hurt the company. Microsoft was also accused of bundling its Internet Explorer browser with Windows, and the EU forced the company to include a browser ballot with non-Microsoft browsers in an effort to improve competition.
The EU’s changes helped push browser alternatives like Firefox and Chrome directly inside Windows, and rival browsers benefited. If the EU forces Google to make similar changes inside Android, those will be a much bigger headache than a record-breaking fine. Microsoft was paralyzed by the EU oversight, and the company had to consider its business decisions wisely as a result. We’ll find out next month if Google will face similar action.