Alphabet Inc GOOG GOOGL suffered a $5.1 billion, or €4.34 billion, fine Wednesday for antitrust activity in Europe.
The European Commission said Google obstructed digital rivals by negotiating with handset makers like Samsung, HTC and Huawei to favor Google’s Chrome browser and search bar through preinstallation.
“Google has used Android as a vehicle to cement the dominance of its search engine,” Margrethe Vestager, Europe’s antitrust chief, said in a press release. “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 E.U. antitrust rules.”
Why It’s Important
The penalty was a record for the European regulators and for Google. Last year’s charge for Google favoring its own services in online search results amounted to just $2.7 billion. Still, it represented just 0.6 percent of Alphabet’s Wednesday morning market cap.
As the EU cracks down on online antitrust activity, Google remains under scrutiny and the threat of additional fines.
Alphabet shares traded down less than 1 percent following the decision.
Google has 90 days to stop its practices, or the EU will strike with additional fines up to 5 percent of Alphabet’s average daily global revenues.
The firm announced it will appeal the regulators’ decision and assured that its Android ecosystem and innovation has created more choices for consumers and stimulated robust competition.
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