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Google

In fining Google, European Union regulators are doing what their American counterparts will not

The real test is whether Google will change its behaviour in the face of an even tougher penalty or win its appeal

PUBLISHED : Sunday, 22 July, 2018, 9:44pm
UPDATED : Sunday, 22 July, 2018, 10:48pm

It would be hard to think of a greater case of dominance in the world of business today than Google when it comes to online searches. That, in itself, does not amount to anti-competitive behaviour. It may be well that the tech giant not only pioneers the service but also offers a superior product. But what does earn Google and its parent, Alphabet, 4.3 billion (HK$39.5 billion) antitrust fine is that it has been found to have abused the dominance of its Android operating system in mobile devices against rivals.

Google deserves the fine, even though it only amounts to two months of gross revenue. The real test is whether it will change its behaviour in the face of an even tougher penalty or win its appeal, which it has vowed to launch.

Google fined record US$5 billion by EU, told to alter Android model

According to the competition commissioner of the European Union, Google has illegally used “tying” methods to compel smartphone makers to pre-install its own search app and Chrome browser in order for customers to use Google Play, the app store. This directly discourages people from looking for rival services.

Google is able to do that because its Android operating system is used in more than 80 per cent of smartphones around the world at a time when people are migrating more and more online searches from desktop computers to mobile devices.

Commissioner Margrethe Vestager is doing the world a favour. Her office has become the scourge of US tech giants when American antitrust regulators have been all too lenient with them. Google was previously fined 2.4 billion for biasing searches in comparison shopping by favouring its own clients and advertisers. Vestager has also ordered Ireland to collect 13 billion in back taxes from Apple over the country’s lenient tax treatment. Microsoft was punished with successive rulings over anti-competitive behaviour with fines totalling 2 billion between 2004 and 2013.

Google investors shrug off EU Fine and look to future competition with rivals such as Amazon, Microsoft

No wonder American politicians are upset. US President Donald Trump has denounced the latest fine against Google and has tied it with what he claims are unfair trade practices pursued by the European Union against his country. His claims are groundless. If US regulators won’t do their job, it’s left to the Europeans to do it.