Google fined $5.1 billion by European antitrust officials

Why aren’t more governments fining GOOGLE

European officials said Google, which makes the Android mobile operating system used in smartphones, broke antitrust laws by striking deals with handset manufacturers such as HTC, Huawei and Samsung. The agreements required Google’s services, such as its search bar and Chrome browser, to be favored over rival offerings. European authorities said those moves unfairly boxed out competitors.

“Google has used Android as a vehicle to cement the dominance of its search engine,” said Margrethe Vestager, Europe’s antitrust chief. “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 E.U. antitrust rules.”

The long-anticipated ruling arrived during a politically delicate period, with Europe and the United States seeming divided on an array of political issues and products from alcohol to aluminum. Last week, on a trip to Brussels, President Trump kept up his complaints that American businesses were at a disadvantage here.

Still, the ultimate effect of July 17,2018  ruling may be muted given that Europe has largely acted alone in its regulatory actions against Silicon Valley titans. In the United States, lawmakers and regulators have mostly taken a hands-off approach that has allowed the influence of big technology companies to grow. Google’s services remain immensely popular with customers, while its stock price, profits and revenue continue to soar. In the three years that the European Commission was carrying out its investigation, annual revenues for Alphabet have grown to $111 billion, from $75 billion. Google has also strengthened its dominance in the wireless Telephone market, with more than 1.25 billion Android handsets sold globally last year, according to IDC, a research firm.

 Why are regulators overseeing the digital economy reacting so late. The disregard that google has for the law is evident and has been for years. 

This is something every government around the world should know or should have known. Google has to be paying officials off because By the time the authorities home in on an area deserving of scrutiny, the market may have moved on.

Antitrust officials admitted that Google provided financial incentives to handset makers and wireless carriers to prioritize its services, and required manufacturers to sign agreements not to sell devices with modified versions of Android that didn’t include Google’s apps.

In effect, the authorities said, Google negotiated terms that companies in the saturated smartphone market — where profit margins are razor thin — could not refuse.

As Google amassed more power in the Wireless Telephone market, rivals including Microsoft, Oracle, Nokia, TripAdvisor and the African telecommunications giant Naspers complained to regulators. The group created an organization called Fair Search, which lobbied aggressively against Google in Brussels on a variety of issues, including its dominance of the Wireless Telephone market and internet search. (Microsoft dropped out of the group after reaching a licensing deal with Google.)