Google to Appeal $5 Billion Antitrust Fine, Voices Fear for Android Open Source System
Google didn't waste time hitting back at the European Union after it issued a massive antitrust penalty against the tech giant.
July 18, 2018 at 02:51 PM
4 minute read
Google said today it will appeal the astronomical $5 billion fine levied against it by the European Union for violating antitrust laws with its Android system. The company also angrily accused the EU of attacking its open source business model.
The Android operates on a free, open platform for smartphones, so critics said the decision could have dire ramifications for other open source systems.
The EU said that to obtain the free system, phone manufacturers had to include a bundle of Google services, such as its search bar and Chrome browser.
“Google has imposed illegal restrictions on Android device manufacturers and mobile network operators to cement its dominant position in general Internet search,” the EU said in its statement announcing the fine.
The $5 billion fine dwarfs the EU's previous record $2.7 billion penalty, also against Google, in 2017. That ruling is still being fought in EU courts.
The monetary penalty revealed Wednesday could grow.
“Google must now bring the conduct effectively to an end within 90 days or face penalty payments of up to 5 percent of the average daily worldwide [revenue] of Alphabet, Google's parent company,” the EU said.
“It's a huge fine and it's an important aspect of their business,” said Jay Himes, co-chairman of the antitrust group at Labaton Sucharow and a former antitrust bureau chief in the New York Attorney General's Office. “I don't imagine that's going to be resolved easily. They are set for another lengthy proceeding in the EU court system.”
Himes said he has never seen a fine as large as this one, for any violation in any country. “The huge fine alone might have resonance with the EU courts,” he said.
He acknowledged that the EU Commission has substantial fining authority in such matters. “But even so, this is big, particularly [as] it is not for hard-core conduct, like price-fixing,” Himes said.
Reaction to the ruling from Mountain View was swift. Google CEO Sundar Pichai wrote in his blog that the EU is threatening its Android business model, which he said has enabled rapid innovation, wide choice, and falling prices, normally considered hallmarks of robust competition.
“Today's decision rejects the business model that supports Android, which has created more choice for everyone, not less,” Pichal said in announcing Google's intention to appeal.
The Consumer Technology Association, an Arlington, Virginia, trade group representing consumer electronics manufacturers, tweeted: “Today's decision by the European Council on #androidworks case threatens innovation that's enabling the concept of software everywhere & has ramifications far beyond a single company. This will hurt app devs, content creators, marketing firms & more.”
The Information Technology and Innovation Foundation, a leading science and technology policy think tank, released a statement from ITIF Vice President Daniel Castro calling the ruling “misguided and shortsighted.”
The Android mobile operating system has created “enormous value for consumers, developers, and device makers,” the statement said. “The commission's ruling is a blow to innovative, open-source business models; and other companies will likely think twice before trying to develop anything other than a proprietary, closed system.”
The EU also accuses Google of making payments to some large manufacturers and mobile network operators on the condition that they exclusively pre-install the Google Search app on their devices.
Additionally, the EU said Google prevented manufacturers who wished to pre-install Google apps from selling any smart mobile device running on alternative versions of Android not approved by Google, or so-called Android forks.
In the EU's statement, Commissioner Margrethe Vestager, who is in charge of competition policy, said, “Today, mobile internet makes up more than half of global internet traffic. … Google has used Android as a vehicle to cement the dominance of its search engine. 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 content has been archived. It is available through our partners, LexisNexis® and Bloomberg Law.
To view this content, please continue to their sites.
Not a Lexis Subscriber?
Subscribe Now
Not a Bloomberg Law Subscriber?
Subscribe Now
NOT FOR REPRINT
© 2024 ALM Global, LLC, All Rights Reserved. Request academic re-use from www.copyright.com. All other uses, submit a request to [email protected]. For more information visit Asset & Logo Licensing.
You Might Like
View AllRead the Document: 'Google Must Divest Chrome,' DOJ Says, Proposing Remedies in Search Monopoly Case
3 minute readPorsche's Venture Capital Arm Adds General Counsel From Clifford Chance
Companies' Dirty Little Secret: Those Privacy Opt-Out Requests Usually Aren't Honored
Elon Musk Names Microsoft, Calif. AG to Amended OpenAI Suit
Trending Stories
- 1How I Made Partner: 'Develop a Practice Area You Really Care About ,' Says Jennifer Gniady of Stradley Ronon
- 2Indian Billionaire Gautam Adani Indicted in Brooklyn for Alleged Orchestration of $250 Million Bribery Plot
- 3Eagle Pharma Founder Sues Company to Recoup Cost of SEC Investigation
- 4GC Conference Takeaways: Picking AI Vendors 'a Bit of a Crap Shoot,' Beware of Internal Investigation 'Scope Creep'
- 5Legal Events for Georgia Lawyers
Who Got The Work
Michael G. Bongiorno, Andrew Scott Dulberg and Elizabeth E. Driscoll from Wilmer Cutler Pickering Hale and Dorr have stepped in to represent Symbotic Inc., an A.I.-enabled technology platform that focuses on increasing supply chain efficiency, and other defendants in a pending shareholder derivative lawsuit. The case, filed Oct. 2 in Massachusetts District Court by the Brown Law Firm on behalf of Stephen Austen, accuses certain officers and directors of misleading investors in regard to Symbotic's potential for margin growth by failing to disclose that the company was not equipped to timely deploy its systems or manage expenses through project delays. The case, assigned to U.S. District Judge Nathaniel M. Gorton, is 1:24-cv-12522, Austen v. Cohen et al.
Who Got The Work
Edmund Polubinski and Marie Killmond of Davis Polk & Wardwell have entered appearances for data platform software development company MongoDB and other defendants in a pending shareholder derivative lawsuit. The action, filed Oct. 7 in New York Southern District Court by the Brown Law Firm, accuses the company's directors and/or officers of falsely expressing confidence in the company’s restructuring of its sales incentive plan and downplaying the severity of decreases in its upfront commitments. The case is 1:24-cv-07594, Roy v. Ittycheria et al.
Who Got The Work
Amy O. Bruchs and Kurt F. Ellison of Michael Best & Friedrich have entered appearances for Epic Systems Corp. in a pending employment discrimination lawsuit. The suit was filed Sept. 7 in Wisconsin Western District Court by Levine Eisberner LLC and Siri & Glimstad on behalf of a project manager who claims that he was wrongfully terminated after applying for a religious exemption to the defendant's COVID-19 vaccine mandate. The case, assigned to U.S. Magistrate Judge Anita Marie Boor, is 3:24-cv-00630, Secker, Nathan v. Epic Systems Corporation.
Who Got The Work
David X. Sullivan, Thomas J. Finn and Gregory A. Hall from McCarter & English have entered appearances for Sunrun Installation Services in a pending civil rights lawsuit. The complaint was filed Sept. 4 in Connecticut District Court by attorney Robert M. Berke on behalf of former employee George Edward Steins, who was arrested and charged with employing an unregistered home improvement salesperson. The complaint alleges that had Sunrun informed the Connecticut Department of Consumer Protection that the plaintiff's employment had ended in 2017 and that he no longer held Sunrun's home improvement contractor license, he would not have been hit with charges, which were dismissed in May 2024. The case, assigned to U.S. District Judge Jeffrey A. Meyer, is 3:24-cv-01423, Steins v. Sunrun, Inc. et al.
Who Got The Work
Greenberg Traurig shareholder Joshua L. Raskin has entered an appearance for boohoo.com UK Ltd. in a pending patent infringement lawsuit. The suit, filed Sept. 3 in Texas Eastern District Court by Rozier Hardt McDonough on behalf of Alto Dynamics, asserts five patents related to an online shopping platform. The case, assigned to U.S. District Judge Rodney Gilstrap, is 2:24-cv-00719, Alto Dynamics, LLC v. boohoo.com UK Limited.
Featured Firms
Law Offices of Gary Martin Hays & Associates, P.C.
(470) 294-1674
Law Offices of Mark E. Salomone
(857) 444-6468
Smith & Hassler
(713) 739-1250