Why in news?
The EU had slapped a record € 4.34-billion ($5.04 billion) antitrust fine on Google.
What is the reason?
- The penalty is for illegally using the Android operating system.
- Google has used Android to strengthen the dominance of its search engine.
- It aimed at ensuring that traffic on Android devices go to its search engine.
How did Google do this?
- Google imposed three types of restrictions on Android device manufacturers and network operators.
- Pre-installation - Manufacturers were asked to preload the Google Search app and Chrome browser.
- This was as a condition for licensing Google’s Play Store.
- Pre-installation of the apps can create a status quo bias among the users.
- Evidently, Google Search app is consistently used more on Android devices.
- However, it is not the case with Windows Mobile devices where users must download it.
- Incentives - Google offered financial incentives to large device manufacturers and network operators.
- The condition was to exclusively pre-install Google Search across their entire portfolio of Android devices.
- This significantly reduced their incentives to pre-install rival search apps.
- However, EU said that by 2014, Google had stopped the practice.
- Tweaked versions - Android is an open-source operating system.
- It has its code published by Google online whenever a new version is released.
- So based on this source code, developers like Android can create their own versions.
- This could be done even without getting approval from Google.
- So Google had not allowed the “forked” versions of Android to pre-install Google’s proprietary apps.
- Google’s measure had thus prevented many manufacturers from developing and selling devices based on these tweaked versions.
- E.g. Amazon’s Android fork called ‘Fire OS’
- EU now insists that Google allow the forked versions of Android.
What are the earlier instances?
- EU - Earlier, the EU fined Google €2.42 billion.
- This was on charges of prioritising its own services on the search platform.
- By this, Google gave itself an advantage over third-party service providers.
- India - The Competition Commission of India had earlier fined Google Rs 136 crore.
- It was slapped for its unfair business practices in the Indian online search market.
- The National Company Law Appellate Tribunal (NCLAT) stayed the ruling on Google’s appeal.
- Nevertheless, NCLAT asked it to pay 10% of the penalty. The tribunal will soon hear the matter.
What are the implications?
- The recent penalty may not financially hurt Google with over $100 billion in cash reserves.
- But it could bring about changes in the way the Android ecosystem functions.
- It would set a precedent for other antitrust cases against Google.
Source: Indian Express
