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Anorak | European Union fines Google €4.3 billion over Android

European Union fines Google €4.3 billion over Android

by | 18th, July 2018

It sounds a bit odd that someone has to pay a fine to the European Union for giving something away but such are the twists and turns of antitrust law. The EU has fined Google €4.3 billion (£3.8 billion) over Android, the operating system that they simply give away to anyone who asks for it.

Ah, well, not quite, it comes with some conditions, even if payment is not required, and it’s those conditions which matter:

The European Commission fined Google €4.3 billion ($5 billion) on Wednesday for antitrust violations related to Android, its popular mobile operating system.

The penalty represents the largest ever antitrust fine levied by Europe’s competition authorities against a single company, and marks a significant step by Margrethe Vestager, the EU’s antitrust chief, in her ongoing stand-off with the U.S. search giant.

There’s a significant problem here concerning the very definition of what is bad behaviour concerning antitrust law. Being a monopoly and then rooking everyone is indeed bad behaviour about which we’d like government to do something. But just being dominant may or may not cut it. It’s this distinction which is at the heart of why the EU’s decisions are different from those of the US.

Margrethe Vestager, the EU’s competition commissioner, said Google has used its Android mobile phone operating system “to cement its dominance as a search engine”, preventing rivals from innovating and competing “and this is illegal under EU antitrust rules”.

The following isn’t exactly accurate but it’s close enough. The US system says that consumers must actually be harmed before there’s a monopoly or antitrust issue that must be addressed. Near all economists agree on that point, that if harm is being done then do something. The EU position is rather more, well, if people are working themselves into a position where they could do harm if they decided to, then we must do something. The actual harm doesn’t come into it. Not that many economists agree with this formulation.

That’s why we’ve got activity which is entirely legal under US law being fined here in the EU. My own view is that the US is right here.

There is one little delight though:

Vestager said Google has become dominant across Europe for internet search, licensable smartphone operating systems and for the Google Play app store. “With market dominance comes responsibility,” she explained.

It’s that Google Play part that amuses. Google has some 90% of the market for places which people can download Android apps from. Hmm, OK.

Apple has 100% of the market for places people can download iOS apps from. If I were Apple I’d be a little worried right now.



Posted: 18th, July 2018 | In: Key Posts, News, Technology Comment | TrackBack | Permalink