European Union authorities have fined Google
The fine amounts to an estimated two weeks of revenue for Google, which might hurt them a little, but more troublesome for the company is the future impact of the EU's ruling on Google's business.
The EU is accusing Google of using its powerful position in the market to unfairly place its own search engine in a dominant position by pre-installing Google on Android devices and offering a cut of search profits to manufacturers and telecoms who exclusively install Google. The EU blamed Google's exclusivity requirements for the failure of Amazon's
Google controls about 95% of the search engine market on Android devices, which comprise 80% of the smartphone market. The investigation team looked into search engine use on Windows phones and found that Google was used 25% less, implying that they had a large advantage when using pre-installations.
If unable to ensure Google is the default search engine, manufacturers might have to pay for Android service, which could also mean more expensive phones. Then again, this would also mean more competition, which is usually a plus for the consumer. Google CEO Sundar Pichai commented, "...there are costs involved in building Android, and Google has invested billions of dollars over the last decade to make Android what it is today...we earn revenue only if our apps are installed, and if people choose to use our apps instead of the rival apps." Google claims that EU's decision is essentially an attack on their ad-based model which is the main driver of their revenue.
Margrethe Vestager, the EU's antitrust chief, commented that Google has "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."
President Trump weighed in via Twitter: "I told you so! The European Union just slapped a Five Billion Dollar fine on one of our great companies, Google. They truly have taken advantage of the US, but not for long!"