EU Hits Google With $5 Billion Fine For Pushing Apps On Android Users

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Updated at 9:15 a.m. ET

The European Commission has fined Google $5 billion for violating the European Union's antitrust rules — specifically, by forcing manufacturers of Android phones to install the Google search app and the Chrome Web browser.

"Google has used Android as a vehicle to cement the dominance of its search engine," Commissioner Margrethe Vestager said in a statement. "These practices have denied rivals the chance to innovate and compete on the merits."

The tech giant plans to appeal the decision, a Google spokesperson tells NPR.

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

Last year, the European Commission fined Google $2.72 billion for antitrust violations. That time, it found Google was using its search service to improperly promote its shopping service.

The new fine — 4.34 billion euros, or just over $5 billion — sets a world record for such antitrust penalties, Bloomberg reports. And if Google doesn't change its business practices, the cost could grow even higher, with penalty payments added after 90 days.

The European Commission says the large fine is appropriate because of the "duration and gravity" of the antitrust violations.

The executive body says that about 80 percent of smart devices in Europe run on Android. It's not illegal to dominate a market, the European Commission says — but companies aren't supposed to "abuse their powerful market position by restricting competition."

Google licenses its Android operating system to third-party phone manufacturers. The issue, the EU says, is that Google requires Android device-makers to pre-install the Google search and browser apps on "practically all" devices sold in Europe; in the past, the company used financial incentives to further encourage pre-installation. That makes it hard for other search apps to compete, the EU says.

Another problem has to do with rival operating systems. Source code for the Android system is shared online, allowing third parties to modify it and create "forks," or versions of Android not approved by Google. (Amazon's Fire devices, for example, run a "fork" of Android.)

Google has prohibited companies that make Android devices from making and selling any other devices that run Android forks. That gives Google too much power over competition between different operating systems, the EU says.

Google forcefully objects to the ruling, calling it a a rejection of Android's entire business model.

In a blog post, CEO Sundar Pichai said the decision "ignores the fact that Android phones compete with iOS phones." (The European Commission decided that Apple products don't adequately "constrain Google's market power" in part because iPhones are more expensive, and because iPhones use Google search by default anyway.)

Phones typically come preloaded with dozens of apps, not just Google apps, and it's easy to remove them and add new apps instead, Pichai writes. He also says that the rules imposed by Google are meant to "ensure technical compatibility," and that they're optional.

"No phone maker is even obliged to sign up to these rules — they can use or modify Android in any way they want, just as Amazon has done with its Fire tablets and TV sticks," Pichai writes.

Because Google makes the Android platform available for free, the company only makes money off the phones if Google apps are installed and used, Pichai says.

The case is reminiscent of a 2009 agreement between Microsoft and the EU. The EU said that Microsoft was violating antitrust rules by selling computers with Internet Explorer as the default browser, and Microsoft agreed to offer users a choice of browsers instead.

Bloomberg opinion columnist Alex Webb points out a key difference between the two cases. This time around, there's no requirement to promote competitors' apps.</s>European Commission - Press release Antitrust: Commission fines Google €4.34 billion for illegal practices regarding Android mobile devices to strengthen dominance of Google's search engine The European Commission has fined Google €4.34 billion for breaching EU antitrust rules. Since 2011, Google has imposed illegal restrictions on Android device manufacturers and mobile network operators to cement its dominant position in general internet search. Google must now bring the conduct effectively to an end within 90 days or face penalty payments of up to 5% of the average daily worldwide turnover of Alphabet, Google's parent company. Commissioner Margrethe Vestager, in charge of competition policy, said: "Today, mobile internet makes up more than half of global internet traffic. It has changed the lives of millions of Europeans. Our case is about three types of restrictions that Google has imposed on Android device manufacturers and network operators to ensure that traffic on Android devices goes to the Google search engine. In this way, 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. This is illegal under EU antitrust rules." In particular, Google: has required manufacturers to pre-install the Google Search app and browser app (Chrome), as a condition for licensing Google's app store (the Play Store);

made payments to certain large manufacturers and mobile network operators on condition that they exclusively pre-installed the Google Search app on their devices; and

has prevented manufacturers wishing to pre-install Google apps from selling even a single smart mobile device running on alternative versions of Android that were not approved by Google (so-called "Android forks"). Google's strategy and the scope of the Commission investigation Google obtains the vast majority of its revenues via its flagship product, the Google search engine. The company understood early on that the shift from desktop PCs to mobile internet, which started in the mid-2000s, would be a fundamental change for Google Search. So, Google developed a strategy to anticipate the effects of this shift, and to make sure that users would continue to use Google Search also on their mobile devices. In 2005, Google bought the original developer of the Android mobile operating system and has continued to develop Android ever since. Today, about 80% of smart mobile devices in Europe, and worldwide, run on Android. When Google develops a new version of Android it publishes the source code online. This in principle allows third parties to download and modify this code to create Android forks. The openly accessible Android source code covers basic features of a smart mobile operating system but not Google's proprietary Android apps and services. Device manufacturers who wish to obtain Google's proprietary Android apps and services need to enter into contracts with Google, as part of which Google imposes a number of restrictions. Google also entered into contracts and applied some of these restrictions to certain large mobile network operators, who can also determine which apps and services are installed on devices sold to end users. The Commission decision concerns three specific types of contractual restrictions that Google has imposed on device manufacturers and mobile network operators. These have enabled Google to use Android as a vehicle to cement the dominance of its search engine. In other words, the Commission decision does not question the open source model or the Android operating system as such. Google's dominance The Commission decision concludes that Google is dominant in the markets for general internet search services, licensable smart mobile operating systems and app stores for the Android mobile operating system. General search services Google is dominant in the national markets for general internet search throughout the European Economic Area (EEA), i.e. in all 31 EEA Member States. Google has shares of more than 90% in most EEA Member States. There are high barriers to enter these markets. This has also been concluded in the Google Shopping decision of June 2017. Smart mobile operating systems available for licence Android is a licensable smart mobile operating system. This means that third party manufacturers of smart mobile devices can license and run Android on their devices. Through its control over Android, Google is dominant in the worldwide market (excluding China) for licensable smart mobile operating systems, with a market share of more than 95%. There are high barriers to entry in part due to network effects: the more users use a smart mobile operating system, the more developers write apps for that system – which in turn attracts more users. Furthermore, significant resources are required to develop a successful licensable smart mobile operating system. As a licensable operating system, Android is different from operating systems exclusively used by vertically integrated developers (like Apple iOS or Blackberry). Those are not part of the same market because they are not available for licence by third party device manufacturers. Nevertheless, the Commission investigated to what extent competition for end users (downstream), in particular between Apple and Android devices, could indirectly constrain Google's market power for the licensing of Android to device manufacturers (upstream). The Commission found that this competition does not sufficiently constrain Google upstream for a number of reasons, including: end user purchasing decisions are influenced by a variety of factors (such as hardware features or device brand), which are independent from the mobile operating system;

Apple devices are typically priced higher than Android devices and may therefore not be accessible to a large part of the Android device user base;

Android device users face switching costs when switching to Apple devices, such as losing their apps, data and contacts, and having to learn how to use a new operating system; and

even if end users were to switch from Android to Apple devices, this would have limited impact on Google's core business. That's because Google Search is set as the default search engine on Apple devices and Apple users are therefore likely to continue using Google Search for their queries. App stores for the Android mobile operating system Google is dominant in the worldwide market (excluding China) for app stores for the Android mobile operating system. Google's app store, the Play Store, accounts for more than 90% of apps downloaded on Android devices. This market is also characterised by high barriers to entry. For similar reasons to those already listed above, Google's app store dominance is not constrained by Apple's App Store, which is only available on iOS devices. Breach of EU antitrust rules Market dominance is, as such, not illegal under EU antitrust rules. However, dominant companies have a special responsibility not to abuse their powerful market position by restricting competition, either in the market where they are dominant or in separate markets. Google has engaged in three separate types of practices, which all had the aim of cementing Google's dominant position in general internet search. 1) Illegal tying of Google's search and browser apps Google offers its mobile apps and services to device manufacturers as a bundle, which includes the Google Play Store, the Google Search app and the Google Chrome browser. Google's licensing conditions make it impossible for manufacturers to pre-install some apps but not others. As part of the Commission investigation, device manufacturers confirmed that the Play Store is a "must-have" app, as users expect to find it pre-installed on their devices (not least because they cannot lawfully download it themselves). The Commission decision has concluded that Google has engaged in two instances of illegal tying: First, the tying of the Google Search app . As a result, Google has ensured that its Google Search app is pre-installed on practically all Android devices sold in the EEA. Search apps represent an important entry point for search queries on mobile devices. The Commission has found this tying conduct to be illegal as of 2011, which is the date Google became dominant in the market for app stores for the Android mobile operating system.

. As a result, Google has ensured that its Google Search app is pre-installed on practically all Android devices sold in the EEA. Search apps represent an important entry point for search queries on mobile devices. The Commission has found this tying conduct to be illegal as of 2011, which is the date Google became dominant in the market for app stores for the Android mobile operating system. Second, the tying of the Google Chrome browser. As a result, Google has ensured that its mobile browser is pre-installed on practically all Android devices sold in the EEA. Browsers also represent an important entry point for search queries on mobile devices and Google Search is the default search engine on Google Chrome. The Commission found this tying conduct to be illegal as of 2012, which is the date from which Google has included the Chrome browser in its app bundle. Pre-installation can create a status quo bias. Users who find search and browser apps pre-installed on their devices are likely to stick to these apps. For example, the Commission has found evidence that the Google Search app is consistently used more on Android devices, where it is pre-installed, than on Windows Mobile devices, where users must download it. This also shows that users do not download competing apps in numbers that can offset the significant commercial advantage derived through pre-installation. For example, in 2016: on Android devices (with Google Search and Chrome pre-installed) more than 95% of all search queries were made via Google Search; and

devices (with Google Search and Chrome pre-installed) more than 95% of all search queries were made via Google Search; and on Windows Mobile devices (Google Search and Chrome are not pre-installed) less than 25% of all search queries were made via Google Search. More than 75% of search queries happened on Microsoft's Bing search engine, which is pre-installed on Windows Mobile devices. Google's practice has therefore reduced the incentives of manufacturers to pre-install competing search and browser apps, as well as the incentives of users to download such apps. This reduced the ability of rivals to compete effectively with Google. The Commission also assessed in detail Google's arguments that the tying of the Google Search app and Chrome browser were necessary, in particular to allow Google to monetise its investment in Android, and concluded that these arguments were not well founded. Google achieves billions of dollars in annual revenues with the Google Play Store alone, it collects a lot of data that is valuable to Google's search and advertising business from Android devices, and it would still have benefitted from a significant stream of revenue from search advertising without the restrictions. 2) Illegal payments conditional on exclusive pre-installation of Google Search Google granted significant financial incentives to some of the largest device manufacturers as well as mobile network operators on condition that they exclusively pre-installed Google Search across their entire portfolio of Android devices. This harmed competition by significantly reducing their incentives to pre-install competing search apps. The Commission's investigation showed that a rival search engine would have been unable to compensate a device manufacturer or mobile network operator for the loss of the revenue share payments from Google and still make profits. That is because, even if the rival search engine was pre-installed on only some devices, they would have to compensate the device manufacturer or mobile network operator for a loss of revenue share from Google across all devices. In line with the recent EU court ruling in Intel, the Commission has considered, amongst other factors, the conditions under which the incentives were granted, their amount, the share of the market covered by these agreements and their duration. On this basis, the Commission found Google's conduct to be illegal between 2011 and 2014. In 2013 (after the Commission started to look into this issue), Google started to gradually lift the requirement. The illegal practice effectively ceased as of 2014. The Commission also assessed in detail Google's arguments that the granting of financial incentives for exclusive pre-installation of Google Search across the entire portfolio of Android devices was necessary. In this regard, the Commission dismissed Google's claim that payments based on exclusivity were necessary to convince device manufacturers and mobile network operators to produce devices for the Android ecosystem. 3) Illegal obstruction of development and distribution of competing Android operating systems Google has prevented device manufacturers from using any alternative version of Android that was not approved by Google (Android forks). In order to be able to pre-install on their devices Google's proprietary apps, including the Play Store and Google Search, manufacturers had to commit not to develop or sell even a single device running on an Android fork. The Commission found that this conduct was abusive as of 2011, which is the date Google became dominant in the market for app stores for the Android mobile operating system. This practice reduced the opportunity for devices running on Android forks to be developed and sold. For example, the Commission has found evidence that Google's conduct prevented a number of large manufacturers from developing and selling devices based on Amazon's Android fork called "Fire OS". In doing so, Google has also closed off an important channel for competitors to introduce apps and services, in particular general search services, which could be pre-installed on Android forks. Therefore, Google's conduct has had a direct impact on users, denying them access to further innovation and smart mobile devices based on alternative versions of the Android operating system. In other words, as a result of this practice, it was Google – and not users, app developers and the market – that effectively determined which operating systems could prosper. The Commission also assessed in detail Google's arguments that these restrictions were necessary to prevent a "fragmentation" of the Android ecosystem, and concluded that these were not well founded. First, Google could have ensured that Android devices using Google proprietary apps and services were compliant with Google's technical requirements, without preventing the emergence of Android forks. Second, Google did not provide any credible evidence that Android forks would be affected by technical failures or fail to support apps. The effects of Google's illegal practices The Commission decision concludes that these three types of abuse form part of an overall strategy by Google to cement its dominance in general internet search, at a time when the importance of mobile internet was growing significantly. First, Google's practices have denied rival search engines the possibility to compete on the merits. The tying practices ensured the pre-installation of Google's search engine and browser on practically all Google Android devices and the exclusivity payments strongly reduced the incentive to pre-install competing search engines. Google also obstructed the development of Android forks, which could have provided a platform for rival search engines to gain traffic. Google's strategy has also prevented rival search engines from collecting more data from smart mobile devices, including search and mobile location data, which helped Google to cement its dominance as a search engine. Furthermore, Google's practices also harmed competition and further innovation in the wider mobile space, beyond just internet search. That's because they prevented other mobile browsers from competing effectively with the pre-installed Google Chrome browser. Finally, Google obstructed the development of Android forks, which could have provided a platform also for other app developers to thrive. Consequences of the decision The Commission's fine of €4 342 865 000 takes account of the duration and gravity of the infringement. In accordance with the Commission's 2006 Guidelines on fines (see press release and MEMO), the fine has been calculated on the basis of the value of Google's revenue from search advertising services on Android devices in the EEA. The Commission decision requires Google to bring its illegal conduct to an end in an effective manner within 90 days of the decision. At a minimum, Google has to stop and to not re-engage in any of the three types of practices. The decision also requires Google to refrain from any measure that has the same or an equivalent object or effect as these practices. The decision does not prevent Google from putting in place a reasonable, fair and objective system to ensure the correct functioning of Android devices using Google proprietary apps and services, without however affecting device manufacturers' freedom to produce devices based on Android forks. It is Google's sole responsibility to ensure compliance with the Commission decision. The Commission will monitor Google's compliance closely and Google is under an obligation to keep the Commission informed of how it will comply with its obligations. If Google fails to ensure compliance with the Commission decision, itwould be liable for non-compliance payments of up to 5% of the average daily worldwide turnover of Alphabet, Google's parent company. The Commission would have to determine such non-compliance in a separate decision, with any payment backdated to when the non-compliance started. Finally, Google is also liable to face civil actions for damages that can be brought before the courts of the Member States by any person or business affected by its anti-competitive behaviour. The new EU Antitrust Damages Directive makes it easier for victims of anti-competitive practices to obtain damages. Other Google cases In June 2017, the Commission fined Google €2.42 billion for abusing its dominance as a search engine by giving an illegal advantage to Google's own comparison shopping service. The Commission is currently actively monitoring Google's compliance with that decision. The Commission also continues to investigate restrictions that Google has placed on the ability of certain third party websites to display search advertisements from Google's competitors (the AdSense case). In July 2016, the Commission came to the preliminary conclusion that Google has abused its dominant position in a case concerning AdSense. Background Today's decision is addressed to Google LLC (previously Google Inc.) and Alphabet Inc., Google's parent company. The Commission opened proceedings concerning Google's conduct as regards the Android operating system and applications in April 2015 and sent a Statement of Objections to Google in April 2016. Article 102 of the Treaty on the Functioning of the European Union (TFEU) and Article 54 of the EEA Agreement prohibit abuse of a dominant position. More information on this investigation is available on the Commission's competition website, in the public case register under the case number 40099. IP/18/4581 Press contacts: General public inquiries: Europe Direct by phone 00 800 67 89 10 11 or by email</s>The European Commission has fined Google a record $5 billion (€4.34 billion) for breaching EU antitrust rules, a decision the internet search giant immediately said it would appeal.

The fine stems from Google practices that the commission said were used “to cement its dominant position in general internet search,” according to a commission statement. The statement said Google required handset manufacturers to pre-install the Google Search app and its Chrome browser, limiting rival search engines, and also “made payments to certain large manufacturers and mobile network operators on condition that they exclusively pre-installed the Google Search app on their devices.”

The statement added that Google “prevented manufacturers wishing to pre-install Google apps from selling even a single smart mobile device running on alternative versions of Android.”

Google denied engaging in anti-competitive practices. “Android has created more choice for everyone, not less,” said Google spokesman Al Verney. “A vibrant ecosystem, rapid innovation and lower prices are classic hallmarks of robust competition. We will appeal the commission’s decision.”

The commission accused Google of plotting for years to maintain its stranglehold on the internet-search market. “Google obtains the vast majority of its revenues via its flagship product, the Google search engine,” Wednesday’s statement said. “The company understood early on that the shift from desktop PCs to mobile internet, which started in the mid-2000s, would be a fundamental change for Google Search. So, Google developed a strategy to anticipate the effects of this shift, and to make sure that users would continue to use Google Search also on their mobile devices.”

About 80% of smart mobile devices in Europe and worldwide run on Android, whose original developer Google bought in 2005, the commission said. Google must now bring its practices “effectively to an end within 90 days or face penalty payments of up to 5% of the average daily worldwide turnover of Alphabet, Google’s parent company.”

Margrethe Vestager, the EU’s competition commissioner, acknowledged during a news conference in Brussels that Google’s version of Android does not prevent device owners from downloading alternative web browsers or using other search engines. But she said only 1% of users downloaded a competing search app and 10% a different browser.

Google’s practices “have denied rivals the chance to innovate and compete on the merits,” Vestager said in the statement issued by the European Commission. “They have denied European consumers the benefits of effective competition in the important mobile sphere. This is illegal under EU antitrust rules.”

This is not the first time European authorities have slapped the internet-search giant with a massive antitrust fine. In June 2017, the European Commission said Google had to pay a €2.42 billion fine for favoring its shopping service in searches, in breach of antitrust rules. Google has appealed that fine as well, and a final ruling is still pending.</s>Google was fined $5 billion by the European Union and ordered to change the way it puts search and web browser apps on Android mobile devices, setting a global record for antitrust penalties.

The penalty — the same amount the Netherlands contributes to the EU budget every year — is far higher than any other dished out by the U.S., Chinese or other antitrust authorities. More significantly, Google was given 90 days to stop what the EU said were “illegal practices” on contracts with handset manufacturers that push Google services in front of users.

“Google has used Android as a vehicle to cement the dominance of its search engine,” EU Competition Commissioner Margrethe Vestager said in an emailed statement. “These practices have denied rivals the chance to innovate and compete on the merits.”

Google has built a massive business of banner and videos ads, thanks largely to its central role on Android devices. Google will account for a third of all global mobile ads in 2018, according to research firm eMarketer, giving the company around $40 billion in sales outside the U.S. Google risks losing that traction if it is forced to surrender its real estate on millions of Android phones.

Google immediately said it would challenge the ruling at the EU courts.

“Android has created more choice for everyone, not less,” Google spokesman Al Verney said in an emailed statement. “A vibrant ecosystem, rapid innovation and lower prices are classic hallmarks of robust competition.”

The EU’s decision would bring the running total of Google fines to about 6.7 billion euros after last year’s penalty over shopping-search services. It could soon be followed by more fines from a probe into online advertising contracts.

 The European Commission fine exceeds last year’s then-record 2.4 billion-euro penalty following an investigation into Google’s shopping-search service. Google owner Alphabet Inc. and the commission both declined to comment on the Android fines.

Alphabet generated about the same amount of money as the record penalty every 16 days in 2017, based on the company’s reported annual revenue of $110.9 billion for the year.

Any appeal by Google wouldn’t change its need to comply with the EU order, unless it gets the EU court to allow “interim measures” that halt the commission findings.

The EU said Google ensures that Google Search and Chrome are pre-installed on “practically all Android devices” sold in Europe. Users who find these apps on their phones are likely to stick with them and “do not download competing apps in numbers that can offset the significant commercial advantage derived on pre-installation.”

Google’s actions reduce the incentives for manufacturers to install and for users to seek out competing apps, it said.

 The probe targeted contracts that require manufacturers of Android phones to take Google’s search and browser apps and other Google services when they want to license the Play app store, which officials say is a “must-have” for new phones.

The EU also found illegal Google’s “significant financial incentives” to telecoms operators and manufacturers that exclusively install Google search on devices. Rivals couldn’t compete with these payments, making it difficult for any other search engine to get their app pre-installed. The EU said Google stopped doing this in 2014.

Google’s contracts also prevented handset makers selling phones using other versions of Android, the EU said. This hampered manufacturers from making devices using Amazon.com Inc.’s Fire OS Android version, it said.

The “decision hits Google the hardest of all current antitrust investigations by the commission,” said Andreas Schwab, a German lawmaker at the European Parliament. “Today’s decision and fine are a logical consequence, as this is a clear anticompetitive behavior to me.”

Google has previously said it will argue that the EU is wrong and that it doesn’t block users or handset manufacturers from installing other apps. In its view, an EU ruling will harm app developers and customers by undercutting Google’s business model of giving away Android software and generating revenue from mobile advertising. That keeps smartphone prices low, it says.

Google has a market share of more than 90 percent for general Internet search, licensed smart mobile operating systems and app stores for Android software, the EU said in 2016.

Vestager said her decision wouldn’t prevent Google from monetizing the Android operating system and recoup the investments it has made.

Regulators rejected arguments that Apple Inc. competes with Android, saying Apple’s phone software can’t be licensed by handset makers and that Apple phones are often priced outside many Android users’ purchasing power. Users face “switching costs” to move from Apple to Android and would continue to face Google Search as a default on Apple devices.</s>You might see a few changes coming to the way you use Android smartphones and Google apps in the next three months.

Google has been fined a record $5 billion (4.3 billion euros/£3.8 billion) by Europe’s competition watchdog for abusing its dominant Android mobile operating system to cement the popularity of Google apps and services.

– Requiring “manufacturers to pre-install the Google Search app and browser app (Chrome), as a condition for licensing Google’s app store (the Play Store)”

– Paying “certain large manufacturers and mobile network operators on condition that they exclusively pre-installed the Google Search app on their devices”

– Preventing “manufacturers wishing to pre-install Google apps from selling even a single smart mobile device running on alternative versions of Android that were not approved by Google (so-called “Android forks”)”

“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. This is illegal under EU antitrust rules,” the EU Commissions said in its press release.

The big question on everyone’s mind: How will the fine and ordered changes affect your current or future Android phone? The company is planning to appeal the EU Commission’s ruling, so there’s still the chance the ruling is reversed if Google wins the appeal. But assuming the EU Commission’s ruling stands, let’s take a look at the changes Google needs to make to the Android operating system.

Here’s how you can expect Android to change if Google makes the changes:

Some Android phones might not include pre-installed versions of Google’s Chrome web browser and Google Search apps, which includes Google’s Assistant voice-controlled AI.

Currently, Android smartphone makers need to include Chrome and Google Search to offer their customers access to the Google Play Store and its library of apps that millions of people use. Without access to the Play Store, an Android smartphone is destined to fail due to a lack of apps, as mobile app developers usually only make apps for Apple’s iOS and Google’s Android.

After 90 days, Android phones may no longer come with Google Chrome or Google Search should an Android smartphone maker not wish to include them. Instead, smartphone makers can exclusively pre-install their own web browsers and search apps, without needing to include Google’s Chrome or Search apps.

This might not affect anyone who usually uses whatever default browser is on their smartphone, like Samsung’s Internet app. But anyone who would actively want to use Google Chrome and Google Search on an Android smartphone that doesn’t come pre-installed with those apps would need to find them in the Google Play Store and install them manually.

Smartphone makers could still include Chrome and Google Search, but they wouldn’t be bound to do so. Many Android smartphone makers already offer their own web browsers as the default browser, but they also include Google’s Chrome as an option, often hidden within a smartphone’s app library.

Using Chrome has several benefits if you use other Google products and apps, as they can be synchronized together for ease of use and automation. Google also gets more ad revenue from Chrome users.

As for Google Search, Android users wouldn’t necessarily have built-in native access to things like Google Assistant artificial intelligence (AI) voice assistant or the Google Search bar that often comes pre-installed on an Android phone’s home screen. Google Assistant is currently one of the company’s highest priorities, as AI is seen as the next frontier in tech.

Specifically, omitting Google Search would give other voice-activated assistants, such as Samsung’s Bixby AI assistant, a higher chance of being used over Google’s Assistant.

Even if Google wanted to pay a smartphone maker to exclusively feature Google Search – and thus Google Assistant – it wouldn’t be able to do so anymore, as it has been deemed “illegal” by the EU Commission. As a result, you might not see Google Search and Google Assistant pre-installed on on Android smartphones from certain companies.

Instead, you might find a smartphone maker’s own search app, or a third-party search app, pre-loaded onto an Android smartphone. The same thing goes for a smartphone maker’s own or third-party AI voice assistant.

More smartphones that come with different operating systems…that are still based on Android

We could see more smartphones running on different operating systems. Those different operating systems could still be based on Android, but they could look and work differently, and they were never popular as they weren’t approved by Google in the past.

Without Google’s approval, these Android-based operating systems couldn’t have native access to the Google Play Store. As I mentioned earlier, an Android phone without access to the Play Store is destined to failure. Think back to Amazon’s Fire Phone, which ran the Android-based Fire OS. Fire OS on the Fire Phone wasn’t approved by Google, and it didn’t come with native access to the Google Play Store. Lack of apps, among several other significant reasons, led to the demise and short lifetime of the Fire Phone.

With the EU Commission’s demands, those Android-based operating system that are currently not approved by Google would gain access to the Google Play Store’s apps.

So, we could see Samsung, LG, and any other Android smartphone makers’ phones running on different Android-based operating systems, like Amazon’s Fire OS, for example.

At the end of the day, a smartphone running a significantly different version Android operating system would still, essentially, be an Android phone. It’ll still have access to Google’s Play Store and its Android apps, which is arguably one of the most important factors for an Android phone’s success.

Technically, Google would only need to make these changes in the EU, but it could change Android in the rest of the world.

The EU Commission’s demands wouldn’t force Google to change Android outside the EU’s borders. So, technically, Google can keep business as usual outside the EU.

With that said, it would need to make a separate EU version of its Android operating system with the changes in place. That could result in a disorganized mess for Google and Android, and potentially exacerbate the problematic, fragmented nature of Android ecosystem.

The Android ecosystem is currently fragmented, which means that most Android phones in existence are running several different – and older – versions of the Android operating system. Fragmentation leads to security issues, as well as obstacles for Android app developers. Rolling out a separate EU version of the Android operating system could make its fragmentation problem even worse.

Google plans to appeal the EU Commission’s ruling, but since there’s no timeframe on when that appeal is successful, you could see these changes arriving on Android phones sooner rather than later.</s>Google rules out using AI for weapons or surveillance

Google says Gmail messages sometimes read by third parties

Google prepared Wednesday to be hit with huge EU fine for freezing out rivals of its Android mobile phone system in a ruling that could spark new tensions between Brussels and Washington.

EU Competition Commissioner Margrethe Vestager spoke by telephone with Google chief Sundar Pichai on Tuesday night to tell him about the decision in advance, a source close to the matter told AFP.

Bloomberg reported that Google will be fined $5 billion, citing sources related to the matter.

Vestager is expected to announce that Google abused its dominant position in the market by making tie-ups with phone makers like South Korea's Samsung and China's Huawei.

Two European sources told AFP the fine would be "several billion euros" without giving further details. EU rules say Google could be fined up to 10 percent of parent company Alphabet's annual revenue, which hit $110.9 billion in 2017.

"The fine is based on the length of the infraction, but also on whether antitrust authorities believe there was an intention to commit the offence, and whether they excluded competitors or not," said another source close to the matter.

The European Commission, the 28-nation EU's executive arm, refused to comment.

The long-awaited decision comes as fears of a transatlantic trade war mount due to President Donald Trump's shock decision to impose tariffs on European steel and aluminum exports.

Denmark's Vestager has targeted a series of Silicon Valley giants in her four years as the 28-nation European Union's antitrust chief, winning praise in Europe but angering Washington.

The case against Android is the most significant of three complaints by the EU against the search titan, which has already been hit with a record-breaking 2.4-billion-euro fine in a Google shopping case.

Brussels has repeatedly targeted Google over the past decade amid concerns about the Silicon Valley giant's dominance of internet search across Europe, where it commands about 90 percent of the market.

In the Android file, the European Commission has accused Google of requiring mobile manufacturers such as Samsung and Huawei to pre-install its search engine and Google Chrome browser on phones, and to set Google Search as the default, as a condition of licensing some Google apps.

Google Search and Chrome are as a result pre-installed on the "significant majority" of devices sold in the EU, the commission says.

The complaint formally lodged in April also accuses Google of preventing manufacturers from selling smartphones that run on rival operating systems based on the Android open source code.

Google also gave "financial incentives" to manufacturers and mobile network operators if they pre-installed Google Search on their devices, the commission said.

The EU's biggest ever punishment targeted Apple in 2016 when it ordered the iconic maker of iPhones and iPads to pay Ireland 13 billion euros ($16 billion) in back taxes that it had avoided by a tax deal with Dublin.

The EU has also taken on Facebook over privacy issues after it admitted that millions of users may have had their data hijacked by British consultancy firm Cambridge Analytica, which was working for Trump's 2016 election campaign.

The Google decision comes just one week before European Commission chief Jean-Claude Juncker is due to travel to the United States for crucial talks with Trump on the tariffs dispute and other issues.

Transatlantic tensions are also high after Trump berated NATO allies over defense spending at a summit last week, over his summit with Russian leader Vladimir Putin, and over the US president's pull-out from the Iran nuclear agreement and Paris climate deal.</s>The European Union fined Google a record $5 billion Wednesday for using the market dominance of its Android mobile operating system to force handset makers to install Google apps, reducing choice for consumers.

EU Competition Commissioner Margrethe Vestager said Google went against EU rules when it required mobile phone producers to pre-install the Google Search and browser apps as a condition for licensing Google's app store. She said Google also paid big producers to exclusively pre-install the Google Search app.

Vestager said that "companies must compete on their merits," playing by antitrust rules that favor consumers and open markets, and not restrict competition.

Google said it would appeal. "Android has created more choice for everyone, not less," said company spokesman Al Verney.

The EU's fine is the biggest ever imposed on a company for anticompetitive behavior.

Vestager said that once the size of the company and its turnover is taken into account, the 4.34 billion euro fine is not disproportionate. Google parent company Alphabet made $31.15 billion in revenue in the first three months of the year.

In June last year, regulators already fined Google 2.42 billion euros ($2.8 billion) for favoring its shopping listings in search results.

The ruling comes at a sensitive time for trans-Atlantic relations, with U.S. President Donald Trump lambasting the EU as a "foe" only last week. The U.S. has imposed tariffs on EU steel and aluminum this year and the EU has responded with tariffs on American goods. The U.S. is now also considering taxes on imports of European cars.

The U.S. has also complained that the EU has mainly targeted U.S. companies — including Microsoft and Apple — for breaking competition or tax rules.

In her role, Vestager has continued that tough regulatory approach, but dismissed suggestions there was anything personal.

"I very much like the U.S.," she said, but added such a ruling "has nothing to do with how I feel. Nothing whatsoever."

"We have to protect consumers and competition to make sure consumers get the best of fair competition," she said. "We will continue to do it, no matter the political context."

As technology's impact in modern life spreads, European regulators have set the pace in shaping rules for the industry, which tends to get a freer hand in the U.S. New European rules on data privacy that went into force this year influenced the way some companies operate outside of the region as well, particularly after high-profile data breaches, including at Facebook.

Wednesday's ruling on Google caps an investigation that goes back at least three years. Regulators came out with a preliminary ruling in April 2016 in which they said Google had market shares exceeding 90 percent in most European countries in the realm of licensable mobile operating systems. They said Google abused that share by forcing manufacturers to take its apps and by preventing them from selling altered versions of Android, which is technically open-source software.

At the time, the European Commission said it wanted to ensure that manufacturers are free to pre-install apps of their choosing and allow for competition in services such as internet search.

Google has opposed the Europeans' definition of the market, arguing its real competition is Apple, even though Apple doesn't license its iOS operating system to other device makers.

It also argues that it allows other apps to be pre-installed alongside Google apps, and that agreements not to support altered versions of Android enable it to provide a baseline experience on tens of thousands of different devices.

Functionally, preventing an altered version — or "fork" — of Android also prevents Samsung, a hugely popular maker of Android devices through its Galaxy line, from breaking off and taking much of the Android ecosystem with it.

Google argues that its main way of making money from Android is through advertising and the sale of content and apps, unlike Apple, which makes its profits from device sales. If its business activities are too harshly constrained, the argument follows, Google might no longer be able to provide Android for free to handset makers.</s>Brussels — Google is set to face a record-busting EU antitrust fine this week over its Android mobile operating system, but rivals hoping that an order to halt unfair business practices will help them may be disappointed.

The European Commission’s decision, delayed by a week by US President Donald Trump’s visit to a Nato summit in Brussels last week, is expected on Wednesday.

It comes just over a year after the commission slapped a landmark €2.4bn penalty on Google, a unit of Alphabet, for favouring its shopping service over those of competitors.

The EU penalty is likely to exceed the 2017 fine because of the broader scope of the Android case, sources familiar with the matter told Reuters.

The EU sanction comes in the midst of a trade conflict between the US and EU, which has hit back against US tariffs on European steel and aluminium by targeting $3.2bn in US exports with higher duties.

European Commission President Jean-Claude Juncker will meet Trump in Washington DC on the trade issue next week.

The Android decision is the most important of a trio of antitrust cases against Google.

With the company able to make its ads show up in more smartphone apps than any other tech rival, Google’s app network has quietly become a huge growth engine. The company’s high payouts to app developers, coupled with its entrenched relationship with millions of advertisers, has turned Google into the main revenue source for many apps. Its Play Store accounts for more than 90% of apps downloaded on Android devices in Europe.

Its popularity in turn could mean an uphill battle for EU antitrust regulators seeking to level the playing field for Google’s rivals by ensuring that users can download from competing app stores and that smartphone makers are free to choose pre-installed apps.

Regulators said Google had tilted the field in its favour by forcing smartphone makers to pre-install Google Search with its Play Store and Chrome browser, sign agreements not to sell devices on Android systems and pay smartphone makers to only pre-install Google Search on devices.

Google has denied the charges, saying bundling search with its Google Play allows it to offer the entire package for free and smartphone makers and users have a wide choice.

Regulatory action is probably too late because of Google’s entrenched position, said analyst Richard Windsor at research company Radio Free Mobile.

"Users in the EU are now completely accustomed to using Google services and have come to prefer them," he said.</s>, Brussels, Belgium, Jul 18 – Google faced a record EU anti-trust fine of 4.3 billion euros on Wednesday over its Android smartphone system, in a ruling that risks a fresh clash between Brussels and Washington.

EU Competition Commissioner Margrethe Vestager is expected to say that the US tech giant abused Android’s dominant market position to boost usage of its own search engine and browser.

The new sanction would nearly double the previous record EU anti-trust fine of 2.4 billion euros, which also targeted Google, in that case for the Silicon Valley titan’s shopping comparison service in 2017.

The decision, which follows a three-year investigation, comes as fears of a transatlantic trade war mount due to President Donald Trump’s decision to impose tariffs on European steel and aluminium exports.

Vestager is set to announce the penalty against the US tech giant at a news conference in Brussels at 1100 GMT. A source close to the matter told AFP that the fine would be 4.3 billion euros ($5 billion).

“The fine is based on the length of the infraction, but also on whether antitrust authorities believe there was an intention to commit the offence, and whether they excluded competitors or not,” said another European source.

Danish former minister Vestager, who has targeted a string of US tech titans, spoke by telephone with Google chief Sundar Pichai on Tuesday night to tell him about the decision in advance.

Vestager is expected to say that Google shut out rivals by forcing major phone makers including South Korea’s Samsung and China’s Huawei to pre-install its search engine and Google Chrome browser, thereby freezing out rivals.

They were also made to set Google Search as the default, as a condition of licensing some Google apps. Google Search and Chrome are as a result pre-installed on the “significant majority” of devices sold in the EU, the European Commission says.

An EU complaint formally lodged in April also accuses Google of preventing manufacturers from selling smartphones that run on rival operating systems based on the Android open source code.

Google also gave “financial incentives” to manufacturers and mobile network operators if they pre-installed Google Search on their devices, the commission said.

Under EU rules Google could have been fined up to 10 percent of parent company Alphabet’s annual revenue, which hit $110.9 billion in 2017.

Vestager’s campaign against Silicon Valley giants in her four years as the 28-nation European Union’s competition commissioner has won praise in Europe but angered Washington.

Brussels has repeatedly targeted Google over the past decade amid concerns about the Silicon Valley giant’s dominance of internet search across Europe, where it commands about 90 percent of the market.

As well as the Android and Google Shopping files, it also has a third investigation underway, into Google’s AdSense advert-placing business.

The EU ordered Apple in 2016 to pay Ireland 13 billion euros in back taxes that the iconic maker of iPhones and iPads had avoided by a tax deal with Dublin.

It has also taken on Facebook over privacy issues after it admitted that millions of users may have had their data hijacked by British consultancy firm Cambridge Analytica, which was working for Trump’s 2016 election campaign.

But Brussels has had US tech giants in its sights for a decade in a half, since it imposed a huge 497 million euro fine on Microsoft in 2004 for anti-competitive behaviour and ruled it must make changes to its Windows system.

The Google decision comes just one week before European Commission chief Jean-Claude Juncker is due to travel to the United States for crucial talks with Trump on the tariffs dispute and other issues.

Transatlantic tensions are also high over Trump’s berating NATO allies on defence spending at a summit last week, over his summit with Russian leader Vladimir Putin, and over the US president’s pull-out from the Iran nuclear agreement and Paris climate deal.

Google will appeal the EU decision Wednesday to slap a record 4.34 billion-euro ($5 billion) antitrust fine over the use of its Android operating system, a company spokesman said.

“Android has created more choice for everyone, not less,” Google spokesman Al Verney said in a statement. “We will appeal the (European) Commission’s decision.”</s>The European Commission has fined Google $5 billion for violating EU antitrust laws — specifically, by forcing manufacturers of Android phones to pre-install the Google search app and the Chrome web browser.

"Google has used Android as a vehicle to cement the dominance of its search engine," Commissioner Margrethe Vestager said in a statement. "These practices have denied rivals the chance to innovate and compete on the merits."

The tech giant plans to appeal the decision, a spokesperson tells NPR.

Last year, the European Commission fined Google $2.72 billion for antitrust violations. That time, it found Google was using its search service to improperly promote its shopping service.
The European Commission fines Google €4.34 billion for breaching EU antitrust regulations, claiming that Google abused the dominant position of Android to promote their search product. Google announces it will appeal the ruling.