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European Union (EU) regulators hit Google with a record 4.34 billion euros ($5 billion) antitrust fine on Wednesday, 18 July, for using its Android mobile operating system to squeeze out rivals.
It represents just over two weeks of revenue for Google’s parent company Alphabet Inc. and would scarcely dent its cash reserves of $102.9 billion. But it could add to a brewing trade war between Brussels and Washington.
Google said it would appeal the fine.
EU antitrust chief Margrethe Vestager said, "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."
The EU enforcer dismissed Google's argument of competition from Apple, saying the iPhone maker was not a sufficient constraint because of its higher prices and switching costs for users.
The President of the European Commission Commission President Jean-Claude Juncker, is due to meet US President Donald Trump at the White House next Wednesday in an effort to avert the threatened new tariffs on EU cars amid Trump's complaints over the US trade deficit. This development could raise tensions further.
Android, which runs about 80 percent of the world's smartphones according to market research firm Strategy Analytics, is the most important case out of a trio of antitrust cases against Google.
Regulatory action against tech giants like Google and Facebook with their entrenched market power may lack sting, said Polar Capital fund manager Ben Rogoff, who has been holding the stock since its initial public offering and is broadly neutral on Google.
The EU takedown of Google is six to eight years too late, with users paying the price, said Geoff Blaber of CCS Insight.
"Any action by the EU is akin to shutting the stable door after the horse has bolted," he said.
Lobbying group FairSearch, whose 2013 complaint triggered the EU investigation, welcomed the ruling.
A third EU case, which has not yet concluded, involves Google's AdSense product. Competition authorities have said Google prevented third parties using its product from displaying search advertisements from Google's competitors.
Vestager has also ordered a series of measures against other US companies over tax practices in some EU states, notably demanding two years ago that the Irish government take back up to 13 billion euros from Apple Inc.
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