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Business
10 Jul 2018

Google might face a record penalty in the EU

Google facing a record fine for anti-competitive practices

Google might be facing a record penalty this month from European regulators over what they hold to be an unfair trade practice.

The issue pertains to Google's requirements for original equipment manufacturers (OEMs) selling Android devices, which, regulators maintain, are detrimental to competition.

Last year, Google was fined $2.82bn by the European Commission.

Here's more.

In context

Google facing a record fine for anti-competitive practices

When to expect the verdict on Google

The European Commission's verdict on Google was expected to be delivered on Wednesday, after a meeting on Tuesday. However, the meeting has now been postponed to July 17, reportedly to avoid a clash with US President Trump's visit to Brussels.

Are Google's requirements aimed at consolidating its dominant market position?

Google's requirements

Are Google's requirements aimed at consolidating its dominant market position?

The charges of unfair competition against Google pertains to its requirements for OEMs.

OEMs selling Android devices, in order to be able to run Google Play Store on their devices, are required to have Google Chrome and Search pre-installed.

Failing these requirements, OEMs cannot run Play Store on their devices.

Regulators, understandably, think that the practice is detrimental to competition.

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Regulators' concerns

EU regulators think OEMs are forced to make anti-competitive choices

In the eyes of EU's competition chief, Margrethe Vestager, device makers like Samsung and HTC are forced to make anti-competitive choice owing to Google's policy, wherein they're forced to offer Search and Chrome as default options.

Vestager is also of the opinion that this practice ensures Google's continued dominance in the internet ecosystem of services, and snuffs out potential and extant competition.

What to expect from the EU's forthcoming verdict on Google

Forthcoming verdict

What to expect from the EU's forthcoming verdict on Google

Consequently, Vestager's forthcoming verdict, apart from slapping a record-breaking multi-billion dollar fine on Google, might include restrictions for the tech giant.

This could include barring Google from striking such app-installation deals with OEMs, or the EU could force Google into offering consumers the option to easily switch internet services, like search engines, on their Android phones and tablets.

Consequences

The EU's ruling could have major consequences for Google

Notably, regulatory pressure on Google in the EU could force the tech giant to rethink the entire Android ecosystem.

Google's current policy, by forcibly packaging its own services like Search, allows it to capture data about users and show them more personalized, targeted ads.

If the practice is indeed eliminated, Google might have to rethink its strategy for getting profits and user insights.

EU is emerging as the most aggressive tech company regulator

Regulation in EU

EU is emerging as the most aggressive tech company regulator

The potential regulatory action against Google also highlights the emergence of the EU as the world's most aggressive regulator of US-based technology giants.

Last year, the EU slapped Google with a $2.82bn fine for preferring its own shopping service in Search results over competitors'.

The EU, recently, has also slapped hefty fines on Apple for tax evasion, and on Facebook, for violating privacy agreements.

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