Google just broke the record for the largest antitrust fine issued in the history of the European Union, having nearly doubled the previous record holder – Google. The company’s $5.05 billion fine issued over its illegal restrictions imposed on Android device manufacturers dwarfs the $2.7 billion penalty it was given for promoting its online shopping service in an anti-competitive manner last year and will most likely also surpass the sanction that it has yet to receive due to abusing the dominant position of AdSense in the digital marketing industry at the expense of its rivals once the EU concludes that case in the coming months. While Brussels certainly has a lot of issues with Alphabet’s subsidiary, its Wednesday decision probably won’t amount to much, save for pushing Google into launching a cringe-inducing #AndroidWorks campaign, something that it already managed to do.
The EU concluded that Google’s insistence on having its app suite pre-installed on third-party Android devices is anti-competitive and attached the same label to the company’s incentives given to select original equipment manufacturers to not pre-load rivaling apps on their products. Google unsurprisingly argues Android isn’t a monopoly and antitrust rules hence don’t apply to it and is now set to appeal the decision but regardless of what happens, the development won’t amount to much because it’s a classic case of “too little, too late.” Among other things, the EU said Google’s anti-competitive practices allowed it to abuse the popularity of Android to effectively minimize the amount of competition in the smartphone Internet search segment at a crucial time in history when mobile searches started outpacing their desktop counterparts. While that argument certainly has its merits, the same can hardly be said for the EU’s proposed solution, which is to act after many of Google’s apps already became synonymous with the core Android experience.
The fine itself is also frivolous for a company the size of Google, the entity that amounts for the vast majority of the revenue generated by its parent Alphabet; even assuming that the AdSense case yields another fine comparable to the shopping service one from last year, that’s still just over $10 billion in penalties, or roughly what Alphabet makes in six weeks. 45 days of revenue in exchange for years of monopolistic behavior? Sounds like a pretty good deal for Google, especially since that’s the worst-case scenario and the actual fine will likely be much smaller. Back while Android was still establishing itself in 2009, Intel was hit with the then-largest EU-imposed antitrust fine amounting to some $1.45 billion for abusing its dominance in the microchip industry. Do you know how much of that sum it paid to Brussels to date? Surprise – nothing. OK, not really a surprise.
So, Google’s books won’t be taking a hit anytime soon and the practices it employed to minimize the danger posed by its competitors for years are only now set to end within the next three months, long after they had already done their job and in full compliance with the EU’s directive. While the company is appealing the decision because it doesn’t want to be branded a monopoly, it’s hard to see this ruling as anything but a slap on the wrist for the technology behemoth that is Google. And even after the company complies with the EU’s order, the main result of that development will probably just be more annoyed consumers who aren’t even aware of the fact that there are alternatives to things like Gmail and Chrome and will just want to access the Internet and see their emails as soon as they boot a new device because they’ve been taught to expect such performance out of the box. Admit it, you can already hear your grandma calling you about her new phone being broken because “it came with no Internet.”
Google could even avoid a scenario in which its apps aren’t pre-installed on third-party Android phones so long as it allows OEMs to pre-load competing services on them as well. The question that remains in that scenario is how many OEMs would be willing to do so and the likely answer is “not many” because most electronics manufacturers likely won’t do anything to strain their lucrative relationship with one of the world’s most powerful conglomerates. The only exception to that is Samsung but the South Korean company already has a deal in place with Google.
Ultimately, this all comes down to what kind of conditions OEMs have to fulfill in order to pre-install the Play Store on their handsets, something they all agree is inseparable from the core Android experience. Google so far insisted the Play Store comes bundled with its expanded mobile app suite and while it’s now prevented from doing so within the EU, consumers have already been associating those products with Android for years and breaking that cycle won’t amount to anything save for frustration and confusion anytime soon. Then again, better late than never; the high-profile antitrust case led in the U.S. against Microsoft in the ’90s also wasn’t the timeliest affair ever but many years later, Internet Explorer has finally and fully deservingly been pushed into irrelevance. Of course, that isn’t to say Google doesn’t make good apps, just that it pushed them to users in an illegal manner and marginalized their alternatives, so don’t expect much to come out of this latest fine in the foreseeable future because at the end of the day – would you replace Gmail or Inbox with something else?