The European Union hit Google with a second monster fine. The new $5 billion penalty is almost double the $2.8 billion punishment Google received last year. This time around it wasn’t for antitrust practices related to search as it was the case in 2017. Android is at the center of this antitrust investigation.
Not only does Google have to pay the fine, but it’ll also have to alter its Android distribution contracts with Android vendors and carriers to avoid future fines. Google, threatening that Android might not remain free after the ruling, said it will appeal the decision.
A new report reveals that Google secretly attempted to settle the case, but it was just too late for any settlement talks, according to the EU.
According to Bloomberg, which talked to the EU’s Competition Commissioner Margrethe Vestager, Google’s settlement proposals came in the weeks after the June 2017 fine in the Google Search case.
Google waited at least a year too long to open settlement talks. Vestager said. The company would have had to “reach out immediately after” getting the EU’s initial complaint or statement of objections.
“That didn’t happen in this case, and then, of course, it takes the route that it has now taken,” Vestager said. “So no surprises.”
Vestager explained in the interview that Google should have approached the EU in 2016, after receiving the statement of objections which detailed the antitrust problems with Android.
Google lawyers only drafted a settlement letter last August offering various adjustments that Google could do to its Android business. Bloomberg explains:
Google said it was prepared to adjust contracts to loosen restrictions the EU didn’t like, even weighing distributing apps in two different ways going forward. The letter didn’t go into detail, only setting out an outline to kickstart talks, according to the people, who declined to be identified because the initial conversations with regulators were confidential.
But the EU never sent a formal response, preventing lawyers to discuss the case further. EU officials saw Google’s offer as too little too late, according to sources.
Moving to a cease-and-desist order for Google “seemed to be the best thing to do in this case in order to enable mobile manufacturers to have a real choice,” Vestager said. “It’s a very serious legal infringement, and you see how it has worked. It has cemented Google’s position in search, and it has de-facto locked down Android in a completely Google-controlled ecosystem.”
Before the Android case, Google attempted to settle the Search case with the previous commissioner, Joaquín Almunia. However, those settlement talks, which weren’t secret, failed, after backlash from politicians and publishers.
Vestager became commissioner in 2014, and one of the first things she did was to restart the Google Search investigation. But while the Search case was inherited from the previous administration, the Android case is her own, which may be one other reason why settlement talks may have never been on the table.
Google isn’t the only US tech giant Vestager’s team took on. She ordered Apple to pay $15.2 billion in back taxes and Facebook $128 million for misleading the EU in the WhatsApp purchase.
