The penalty, which relates to Google's "illegal practices" in making its search engine the default on the majority of Android mobiles, was announced at midday today by Margrethe Vestager, the EU's commissioner for competition. These practices have denied rivals the chance to innovate and compete on the merits.
During the investigation, device manufacturers told the Commission that the Google Play Store is a "must-have" app, which consumers expect to have pre-installed, especially since they can not lawfully install it themselves.
Google had shut out rivals by forcing major smartphone makers, including South Korea's Samsung Electronics Co and China's Huawei Technologies Co (華為), to pre-install its search engine and Google Chrome browser, thereby freezing out rivals, Vestager said.
Google makes money when manufacturers pre-load Google apps onto phones and consumers use those apps.
Google blocked manufacturers from selling devices running any alternative versions of Android (otherwise known as "Android forks") not approved by the company.
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The company has 90 days to stop its illegal practices or face additional penalties of up to 5 percent of the average daily worldwide turnover, according to the release.
Skilton said it must be remembered that Google "defines the market" and is therefore not just an innocent bystander. The decision ignores the fact that Android phones compete with iOS phones, something that 89 percent of respondents to the Commission's own market survey confirmed.
The commission has concluded that through these contractual restrictions, the tech giant has been able to cement its dominance "in the market for general internet search services, licensable smart mobile operating systems and app stores for the Android mobile operating system". This is in response to the technology giant's mobile operating software, Android, breaking European antitrust laws. "A vibrant ecosystem, rapid innovation and lower prices are classic hallmarks of robust competition".
The commission took issue with Google's requirement that manufacturers pre-install the Google Search and Google Chrome apps on Android devices in order to use the Google Play Store, a smartphone app through which users download other apps. Google issued a statement that it will be appeal the ruling, but it is unlikely that will lead to a change in decision. It argues that if users see pre-installed browsers and search, they simply use those services to the detriment of all others.
Google has already been targeted over similar violations in Russian Federation, where it was forced to make it easier for consumers to use rival search engines. "The Commission would have to determine such non-compliance in a separate decision, with any payment backdated to when the non-compliance started", it said.