This blog was written by Becky Reid, Tattoo Ink Marketing.
Those of you who enjoy holidays at this time of year may have missed the news that Google has been fined a record €4.34bn for anti-competitive activity relating to its Android operating system. In summary, Google has been found guilty of pre-installing its Chrome and search services on all devices using the Google Play online store. Yes, this fine is not, for once, about high tech taxes or tax avoidance - it's about antitrust.
At the time of writing, Google plans to appeal, saying, "Android has created more choice for everyone, not less. A vibrant ecosystem, rapid innovation and lower prices are classic hallmarks of robust competition." Clearly, the EU competition commissioner, Margrethe Vestager, disagrees.
Some might think Vestager doesn't like Google. She has previously fined the company €2.4bn over a separate probe into its shopping comparison service - a ruling the tech firm is currently appealing against - and she has a third investigation underway into its AdSense business. But Vestager has her eye on all the big tech companies - to date she has ordered Apple to pay €13bn in underpaid taxes and driven investigations into Amazon and Facebook in addition to the action against Google.
This latest Google ruling is reminiscent of the antitrust ruling against Microsoft way back in 1998. For those young enough not to know, Microsoft was found guilty of bundling its 'new' Internet Explorer (IE) browser with its operating system, Windows, which was at the time sold alongside 95% of Intel-compatible PCs.
There are differences in the cases, though, particularly the market dominance that Chrome and search already have compared to IE. The internet itself was only in its infancy and IE was merely a babe in arms back in 1998!
The commissioner also notes that, whilst people may not pay for either of the Google services like they did with Windows, they are paying for it in terms of their own data. And that, as we all know, is quite a hot topic these days.
I'm not knocking Vestager, though. Anyone who can respond to criticism from Donald Trump in the way that she did is alright to me. Trump is reported to have said about her, "Your tax lady, she really hates the US," to which she replied, "I do work with tax and I am a woman so this is 100% correct." But she said she liked the US very much and the commission's decisions had nothing to do with feelings. "The mission is very simple: we have to protect consumers and competition. This is what we do. It has been done before; we will continue to do it."
Google has 90 days to end its "illegal conduct" or its parent company, Alphabet, could be hit with fines amounting to 5% of its daily turnover for each day it fails to comply. The company might change their mind on the appeal, though, as they can easily afford the fine - at the end of March this year its cash reserves totalled nearly $103bn. Read more about the case »
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