The 3 reasons Google was fined $5 billion by the EU

Google fined $5 billion

After a three-year investigation, the European Union on Wednesday imposed a €4.3 billion ($5 billion) fine on Google for breaching the bloc's competition rules with its Android operating system.

Europe has hit Google with a record $5 billion fine.

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

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

Google's practices have denied rival search engines the possibility to compete on the merits. The Commission believes Google's mobile strategy has unfairly strengthened its dominance of internet searching. Google says Android has increased competition among smartphone makers, lowering the prices for consumers.

It is the largest fine imposed by the European Union regulator against a single firm, after a three-year investigation into Google following a complaint by Fairsearch in 2015. Google has said it will appeal the EC decision. The Commission found that Google had imposed illegal restrictions on Android device manufacturers and mobile network operators to maintain its dominant position in search.

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"Google is entitled to set technical requirements to ensure that functionality and apps within its own ecosystem run smoothly, but these technical requirements can not serve as a smokescreen to prevent the development of competing for Android ecosystems", said EU's competition commissioner Margrethe Vestager. "The Commission decision requires Google to bring its illegal conduct to an end in an effective manner within 90 days of the decision". But Google will be forced to make significant changes to the way Android works, and ink new deals with European carriers as well as Android device makers.

You can read EC's full press release here. Pichai also stresses that Android has become so successful because of app support, and Google's technical compatibility rules have ensured that most devices work with those apps.

"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 a source. In 2016, Vestager issued a statement of objections against Google and Android.

Google prevented Android phone makers from selling devices that run "forked" versions of the operating system.

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. "We intend to appeal", Pichai said in a blog post. Users face "switching costs" to move from Apple to Android and would continue to face Google Search as a default on Apple devices.

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