Google slapped with Rs.35,000 crore fine

     Written by : SMTV24x7 | Thu, Jul 19, 2018, 06:28 PM

Google slapped with Rs.35,000 crore fine

New Delhi, Jul 19: The European Union has stunned the trade world by imposing a huge fine on Google Incorporation. 


On Wednesday, European Union slapped a massive fine of $5 billion on Google for the company's alleged anti-competitive practices. Converted into Indian rupees, the money turns out to be around Rs 35000 crore.


Even for a company as big and as profitable as Google, this is a hefty and painful fine, although it is not yet a done deal that the Big G is going to pay this fine. Google intends to appeal, says Google CEO Sundar Pichai.


So, what led the competition commission in the EU to impose such heavy fine on Google. 


# The EU has levied a fine of Euros 4.34 billion, which amounts to $5 billion. This is near twice the fine of $2.4 billion that EU earlier asked Google to pay.


# The reason why EU has fined Google is that it believes the company abused its position in the smartphone market with Android. Commissioner Margrethe Vestager, who looks after competition policy, says: "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 is illegal under EU antitrust rules."


# The problem specifically is this: Android, although created and maintained by Google, is available to any and every phone maker because it has been open sourced. But open source Android is very different from the regular Android that people get on the phone. While open source components can be used by companies to create mobile operating system, like Amazon did for Fire devices earlier, if a company also wants to use Google Play Store and want Google certification for its "Android" the company must agree to install Google apps like Google Search, Google Chrome, Gmail and so on and so forth.


# In particular, Google "has required manufacturers to pre-install the Google Search app and browser app (Chrome), as a condition for licensing Google's app store (the Play Store)," said the EU.


# The EU investigation into Google's Android practices started in 2013 when FairSearch, a group that originally had companies like Nokia, Microsoft, and Oracle as its members, filed a complaint with the EU.


# After the EU announcement, Google now has 90 days to pay the fine as well as stop its Android practices that have led to the fine. "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 turnover of Alphabet, Google's parent company," notes EU statement.


# Google has called the fine unfair with CEO Sundar Pichai saying that Google has created more choices and has not harmed the market.