In 2018, the European Commission ruled that Google has to pay 4.34 billion Euros as a fine for unethical anti-competitive practices. The General Court of the European Union has upheld the ruling almost entirely and sentenced Google to a penalty of € 4.125 billion. After this judgment, the total amount of fines paid and to be paid by Google to the European Union stands at 8.25 billion Euros.
The allegations against Google pertain to three agreements between Google and smartphone manufacturers that serve to kill Google’s competition. Firstly, the MADA (Mobile Application Distribution Agreement) dictates that mobile manufacturers must pre-install the Google search engine and play store. Then comes the AFA (Antifragmrntation agreement) that bars smartphone manufacturers from pre-installing different Android versions on a phone. Finally, the RSA (Revenue Sharing Agreement) grants mobile manufacturers rebates for not installing apps or search engines by Google’s competitors like Microsoft.
These agreements are carefully placed to completely crush Google’s competition and they lie at the core of Google’s business strategy. Google has created an ecosystem of applications combining non-profit and profit-making apps. Google provides the Android OS and the Play store for free in order to increase the footfall in its profit-making apps like the search engine and Google ads.
This judgment can have an impact on other companies like Amazon that follow a similar strategy to grow their business. In fact, a lot of businesses are laid down the way they are based on Google’s policies. The decision by the General Court of the EU can actually cause a domino effect affecting thousands. “This, of course, is really good. Now, we have the second Google judgment and for us, it is really important as it backs our enforcement efforts,” said EU’s competition chief, Margrethe Vestager, according to Reuters.
This case also draws our attention to the DMA (Digital Markets Act) passed by the European Parliament in July 2022. The DMA gives greater control to the users in terms of data sharing, choice of application, right to uninstall an app, and choice of search engines, among other things.