Google is a big name that is known to millions of people through internet services.
Owing 85,000+ employees and having a massive turnover, the company has rapidly grown since its advent. However, a few days back, Google went through a nightmare, as its gigantic bank account has drenched.
Yes, you heard it right! It was Tuesday, 17th July 2018 when European Union regulators gave an immense shock to Google, an American Multinational company with a whopping $2.7 fine.
We would like to state that earlier it was Apple that came under the scam and had to pay a whopping of $15.4 tax to European Union.
Explaining what felt the need to take such step, antitrust chief of European Union, Margrethe Vestager said that the Google was unduly promoting its own shopping evaluation services more than that of its rivals.
“Well, that is an abuse. It is illicit under European antitrust laws,” she explained. Bloomberg further wrote that the European Competition Commission anticipates Google to “give equivalent conduct to its rival price-comparison services and it’s up to the company to chose how it will do this and inform the European Union about its plans in the time span of 60 days”.
This was not the first time that Google has come under such situations for hypothetically carrying anticompetitive activities in the European Union. If we talk about 2014, at that time also, European Parliament had pain-staked a nonbinding resolution that may have called on Google Search engine providers to undo that service from further commercializing.
At present, the allegations have come from Vestager claiming that the Google was suppressing competition on Android gadgets. That was done by forcing its own applications and services onto its customers. Looking forward, the Federal Trade Commission (FTC) has carried comparable investigations of the company for over last one decade, although the two have eventually learned to overcome it.
Kent Walker who is Google General Counsel responded back with an argument to the fine imposed that the shopping results of Google offer services to its consumers.
Walker further wrote saying that while some shopping comparison websites want our company to significantly show them, our data demonstrate that people usually look for links that can successfully take them to the desired product or service they are seeking for and not to the website where they land and over and again have to search what they were searching for.
Well, Walker’s saying clearly signals to the comparison results of the brand “Puma Shoes” that consists of links of 5 distinct European retailers. While these results might look easy, Google shows us advertisements when it is pulled.
The European Union is also investigating Google’s Advertising Business Adsense. Google has 90% internet search market in Europe. The European Union’s latest decision is also being linked to the trade war. US President Donald Trump has imposed tariffs on aluminum and steel import from many countries including the European Union.
Reasons Why European Union Fined Google:
1. Preinstall Browser & Search Application Incentives Declined
Illustrating deeply, the Commission stated that in the year 2017, more than 95% of all search queries on Android version were done through Google Search engine. And when talking about Windows mobile phone, 75% of queries were done through Bing that is the default Search Engine for Windows.
An investigation done by the manufacturers stated to the commission that Google’s “Play Store” has become the must-have application for consumers that comes preinstalled. One can’t by itself install it on their Android devices. Going through such practices, manufacturers’ incentives for browser applications and pre-install applications have declined.
2. Manufacturers Got Paid to Pre-install Google Search
The investigations further claimed that Google was paying to mobile operators as well as the manufacturers under one condition that they will pre-install Google Search application on devices. This practice was started way back in 2011 but slowly began to row back in 2013 after it got alert of commission’s inspection.
3. Foiling Manufacturers to Sell Devices that Run Alternate Android Version
Google had blocked the manufactures from selling the devices that run alternative Android version (Called as Android Forks). To Install such pre-install applications by Google including Google Search and Play Store. Looking forward, Manufacturers had to commit not to sell or even develop a single device that runs on the Android version.
However, Google answered saying that restrictions made on the Android versions were essential to avert fragmentation of the Android ecosystem. Answering back, the commission said that these arguments made by Google were not satisfactory and not well found.
Google has not given appropriate answers to the allegations made by the commission of the European Union. It is not for the first time that European Union has put such allegations on the Google. Looking at the whole scenario, Vestager who is the chief of the European Union said that Google can’t have its cake and eat effortlessly.
Well, it would be interesting to see how Google comes up and prove itself out of this trap that is imposed by EU.