Google is losing a long-term legal battle: The EU’s record fine has been confirmed, the amount is huge!

The end of an eight-year legal saga

The case dates back to 2018, when the European Commission imposed a then-record fine of 4.34 billion euros on Google for abusing the dominant position of its Android mobile operating system. The company spent years challenging that decision in European courts. Although her struggle ultimately failed, it was not entirely in vain. In 2022, the lower court slightly reduced the initial amount to a still record 4.125 billion euros. The highest court of the European Union has now confirmed that penalty, which means that Google no longer has the possibility to appeal and will have to pay the full amount.

The judgment stated:

“The appeal filed by Google and its parent company Alphabet against the judgment of the General Court is rejected, and the sentence imposed for the abuse of the dominant position of Google Search in the context of the Android operating system is confirmed.”

What did Google hide?

The penalty stems from the way Google connects its apps and services to Android phones. The European Union found that Google imposed illegal restrictions on device manufacturers and network operators in order to consolidate the dominant position of its search engine. Regulators objected to the fact that Google’s search engine and the Chrome browser were set as default options on Android, even on devices from other companies such as Samsung and Xiaomi. Under Android’s licensing agreement, manufacturers had to pre-install those apps to gain access to the key Play Store, which gave Google an unfair advantage. The court confirmed that such practices create “status quo bias”, given that users rarely change pre-installed applications. In addition, Google offered financial incentives to some major manufacturers on the condition that they exclusively pre-installed Google’s search engine and prevented manufacturers from selling smartphones with alternative versions of Android.

Throughout the case, Google has taken a similar stance as Microsoft did years earlier in a case related to Windows. The company argued that there is a lot of competition on Android, pointing to alternative search engines and applications that users can freely access.

​- Android has created ‘more choice, not less’ – CEO Sundar Pichai said back in 2018.

However, as Google is well aware, people rarely change the default settings on their phones. The case brought to mind Europe’s actions against Windows, when Microsoft was forced to add browser selection screens to counter Internet Explorer’s dominance. However, while the dominance of Microsoft’s browser is moreć weakened at that time, Google’s market position is still strong.

Europe is not giving up

Although you still disagree with the verdict, Google has said it is moving on.

“In any case, we have adjusted our contracts to be consistent with the original 2018 decision and remain focused on continued innovation and openness for our users, partners and developers,” the company said.

However, much of that “openness” is the result of legal pressures. For example, Google is increasing support for third-party app stores and alternative payment methods in the Play Store, but only as a result of Epic’s antitrust lawsuit. At the same time, there are plans to automatically control the distribution of applications on Android, which advocates of open source projects see as a serious threat. Although this case is closed, the European Union does not stop with investigations against large technology companies. Regulators now have a more powerful tool at their disposal, the Digital Markets Act (DMA), which designates Google and other tech giants as “gatekeepers” subject to additional oversight. The European Commission is currently considering how to use the DMA to force Google to further open up Android to competing artificial intelligence services and share search data with competitors.