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European Union hits <strong>google</strong> with record $5 billion fine in Android antitrust case

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European Union hits google with record $5 billion fine in Android antitrust case

The penalty is the highest ever imposed on a company for breaching E.U. rules.
by Reuters /  / Updated 

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BRUSSELS — European Union regulators hit google with a record $5 billion antitrust fine on Wednesday for using its Android mobile operating system to squeeze out rivals.

The penalty is nearly double the previous record of 2.4 billion euros which the U.S. tech company was ordered to pay last year over its online shopping search service.

It represents just over two weeks of revenue for google parent Alphabet Inc. and would scarcely dent its cash reserves of $102.9 billion. But it could add to a brewing trade war between Brussels and Washington.

EU antitrust chief Margrethe Vestager denied anti-U.S. bias, saying she very much liked the United States.

"But the fact is that this has nothing to do with how I feel. Nothing whatsoever. Just as enforcing competition law, we do it in the world, but we do not do it in political context," she said.

google said it would appeal the fine.

"Android has created more choice for everyone, not less. A vibrant ecosystem, rapid innovation and lower prices are classic hallmarks of robust competition," it said.

Vestager's boss, European Commission President Jean-Claude Juncker, is due to meet President Donald Trump at the White House next Wednesday in an effort to avert threatened new tariffs on E.U. cars amid Trump's complaints over the U.S. trade deficit.

Vestager also ordered google to halt anti-competitive practices in contractual deals with smartphone makers and telecoms providers within 90 days or face additional penalties of up to 5 percent of parent Alphabet's average daily worldwide turnover.

"google has used Android as a vehicle to cement the dominance of its search engine. These practices have denied rivals the chance to innovate and compete on the merits. They have denied European consumers the benefits of effective competition in the important mobile sphere," Vestager said.

The E.U. enforcer dismissed google's argument of competition from Apple, saying the iPhone maker was not a sufficient constraint because of its higher prices and switching costs for users.

Android, which runs about 80 percent of the world's smartphones according to market research firm Strategy Analytics, is the most important case out of a trio of antitrust cases against google.

In June 2017, regulators charged google $2.8 billion for favoring its shopping listings in search results. google appealed that decision, while rolling out a compromise this year that lets competitive comparison shopping engines bid for slots in an auction, a system that critics say still favors the tech giant.

A third E.U. case, which has not yet concluded, involves google's AdSense product. Competition authorities have said google prevented third parties using its product from displaying search advertisements from google's competitors.

Vestager has also ordered a series of measures against other U.S. companies over tax practices in some EU states, notably demanding two years ago that the Irish government take back up to $15 billion from Apple Inc.

Some U.S. officials have complained that the Commission is following a protectionist course, while Vestager, a former Danish minister who is seen as a rising star in E.U. politics, insists she is merely enforcing laws to protect consumers.

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