Commentary

Google Braces For Another Huge European Fine -- This Time For Android

After the furore surrounding last year's €2.4bn fine from the European Commission (EC), one might have been forgiven for thinking that was the end of Google's woes with Brussels.

At the end of last week, however, we had a couple of reminders this was one of three active investigations, meaning that we were only ever one down with two more to go. Now it seems like we're getting close with number two. Google has already had its day of reckoning for anti-competitive behaviour in search, and we're now moving on to the Android mobile operating system.

Reports in the FT and Politico are suggesting that a final verdict could be reached next month, although Politico does caution that those speaking to it under anonymity are warning it could be pushed back another month. 

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Nevertheless, it looks highly likely that Google will find out its fate this summer -- and I suspect it is only a case of waiting to hear how huge the fine will be. The European Commission claims to have been given strong evidence that the tech giant flexes its muscle to ensure that companies using its Android system have to preload its apps -- namely Chrome and Google Play -- but one can imagine Maps and others are involved too. 

Google's defence, other than to plead its innocence, was initially to point to Apple and say it acts in the same way. However, the EC decided that because Apple doesn't licence its iOS to anyone else, it is a different matter. Only work internally on your own system and you're good to go with Safari and App Store. License out your operating system and insist Chrome is the default browser is anti-competitive. That appears to be the starting point for the EC investigation.

Google's assertion that other apps can be downloaded if a user wishes to do so appears to have fallen on deaf ears.

The most likely outcome, then, is Google getting hit with another large fine. Just listening to the statements coming out of Europe, it seems clear that the EC believes it has a strong case, and it just feels like we're only now waiting to hear the size of the fine rather to find out what the verdict is. As the FT points out, the fine could be as high as $11bn, or 10% of Google's annual global revenue, but is very unlikely to go for a figure anywhere near that high. 

The only real question is now is whether the fine will be higher or lower than the record €2.4bn charged last year for anti-competitive behaviour in search results, particularly shopping comparison services. My hunch is that it will be lower because, as Google says, mobile users can still download rival apps whereas they couldn't alter how Google's search engine operated.

We will have to wait and see, however. One thing Google knows for sure is that patience in Brussels has run out with the tech giant that is widely seen as not paying its full and fair share of tax, reacting too late to extremist content and setting up its services to lock out competition.

So there's not a lot of love for Google in the EU's political circles and the tech giant is expecting to find out exactly how little there truly is over the next month, and possibly two -- likely with a second huge fine in consecutive years.

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