Last Wednesday, the European Union upped the ante in their fight with Google via another round of antitrust fines. The Atlantic reports that for the crime of “denying rivals a chance to innovate” through the Android operating system (OS), used on 80 percent of smartphones worldwide, Google is expected to pay the largest fine in EU history with damages of €4.34 billion ($5.06 billion USD) for their “abuse of marketplace dominance”.
“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,” the EU antitrust chief Margrethe Vestager claimed in a statement last week. “They have denied European consumers the benefits of effective competition in the important mobile sphere.”
To translate in non-bureaucratic English: the EU commission found Google were establishing illegal deals with phone manufacturers to have Chrome apps and services pre-installed across all Android phones (a luxury not afforded to their competitors). Furthermore, Google even prevented these manufacturers from installing alternate builds of the Android OS. Despite Android being an open source OS, Google enacted anti-fragmentation agreements to keep manufacturers on Google’s official version of Android that’s pre-approved by the company directly, compared to customized versions (such as Amazon’s Fire OS) which were not allowed on these devices.
Failure to abide by Google’s anti-consumer choice requests would result in threats of restricting creators’ access to the Google Play store, an essential service for consumer hoping apps downloading, cementing a device’s demise. This coercion gave Google a sinister market edge: either cater to our unearned demands, where our official products reside on almost every mobile phone across the globe, or die alone with only your pride.
The commission dictates any illegal conduct must end “in an effective manner within 90 days of the decision,” declaring that Google “did not provide any credible evidence” for claims of lawful cooperation. These illegal payments reportedly ended once the EU began their investigation back in 2014. However, the practice appears to remain the norm in investigation findings.
Alphabet Inc., the owner of Google, plans to appeal all current EU decisions.
This wasn’t their original plan, of course.
According to sources for Bloomberg, Google attempted to settle their fines when the investigation came to light around August 2017. In the wake of their previous EU fine (over €2.4 billion in antitrust damages), Google executives offered to “loosen restrictions” in their Android contracts in exchange for the termination of the antitrust probe. EU officials responded saying the settlement was “no longer an option” and that Google’s offer was “too little too late.”
These events appear convincing when we consider the investigation’s scale.
Google, a powerful corporation that can seriously rival world governments, still views $5 billion as a hell of a lot of money. Alphabet’s financial records show an estimated income of $111 billion during 2017. Their profits, however, only make up $12.6 billion annually. This would mean the EU fine will strip them of 40 percent of their net earnings in one fell swoop.
This is even before the GDPR lawsuit results which could cost the company an additional $4.3 billion in damages for the potential mishandling of user data. Such economic penalties will force the company to either continue paying the price of the company, as revenue continues to be pissed away, or enact significant changes to address their monopoly status moving forward.
It’s no existential crisis, but rather a public perception problem. How Google will fix their image is uncertain. Since Google’s blatant removal of their motto “don’t be evil,” preceding the revelations of third-party email surveillance and backroom deals perfect for techno-mafia movies, will this punishment only encourage Google to resort to other ways of maintaining a greed-fuelled bottom line? The removal of default installations will no doubt impact Google’s future success across a new generation of phones. Users should beware that taking on an established entity like Google, intent on making their profits sky-high, requires sustained pressure to hold them accountable.
The European Commission, for all their faults, appear the only ones who care about the preservation of online rights. As The Wall Street Journal states, Vestager, a Danish politician, has turned herself into the “de facto global regulator” against the elites of Silicon Valley. This person is a benefit now, but can we entrust the enforcement of principles with simply whoever is in power at the moment? Or should we establish an internet bill of rights to establish these principles as law, regardless of who enforces them and when? Why must the EU, an institution growing weaker by the day, be the ones who crackdown on the violations of American companies? It was President Donald Trump who defended Google’s illegal bundling practices by writing:
“I told you so,” the president tweeted. “The European Union has just slapped a Five Billion Dollar fine on one of our great companies, Google. They truly have taken advantage of the U.S., but not for long!”
Ian Bogost, journalist for The Atlantic, is right to see how Vestager has become one of the most influential figures in America’s techno-politics landscape. Scandals post-Cambridge Analytica are met with wrist slaps in Congress, resulting in Facebook hearings about how the site makes money without subscriptions (surprise, it’s through ads!) and whether or not some irrelevant black conservative comedians had 24-hour bans.
There’s no serious discourse or legislative movement on preserving online liberties and rights. The highest representative in the land just cheered on the infringement on those rights. The Federal Trade Commission (FTC) and the Department of Justice, across Democrat and Republican administrations, are fine to let these companies violate in peace. America is known as the independent nation that escaped European tyranny in 1776. Decades later America’s old tyrant might be its new techno-liberator.
How ironic indeed.