With judgment of 14th September 2022 (T-604/18) the EU Court condemned Google to a maxi fine of 4,125 billion euro for having imposed limitations to manufacturers of Android devices in order to consolidate its own dominant position on the market.
The judgment of the EU Court came after the appeal, by the American company, to the previous decision of the European Commission which in 2018 sanctioned Google for abuse of dominant position, with the application of an even higher penalty (4,343 billion euro).
The case concerned the particular conditions imposed by Google to manufacturers and operators of mobile networks who want to install Google applications and services on Android devices sold to final users.
Google’s relevant strength on the market rose starting from 2005, when it acquired the company that originally developed the Android operative system. According to the European Commission, in July 2018 almost 80% of the mobile devices used in Europe and worldwide worked with Android.
Google’s practice is to publish online the source code of each new version of Android, allowing thus third parties to download and modify the code to create an Android “fork” (that is, a new software created from the source code of an existent software). The open-source license released by Google covers basic features of the operative system but not applications and Android services owned by Google. Therefore, manufacturers and mobile network operators wishing to obtain applications and Google services have to sign an additional agreement with Google LLC.
In 2015, following many complaints received by companies active in the Information technologies field, the European commission started a proceeding against Google. It found three types of contractual restrictions imposed in relation to Android:
- Restrictions contained in the applications distribution agreements, with which Google requested manufacturers to pre-install Google Search and the browser Chrome in order to obtain the user license of its app store (Play Store)
- Restrictions contained in the anti-fragmentating agreements, on the basis of which manufacturers wanting to pre-install Google’s apps could not sell devices with versions of Android not approved by Google
- Restrictions contained in the turnover distribution agreements, following which Google granted to manufacturers and mobile network operators a percentage of its advertising revenue earnings, on the condition that such manufacturers and operators accepted to not pre-install a competitor search engine on an agreed number of devices.
On 18th July 2022, the European Commission considered that these three types of restrictions were violating the competition rules because they all turn out as impositions of contractual restrictions aimed at protecting and consolidating Google’s dominant position in general search services.
Following the appealing brought by Google, the EU Court examined again the issue partially annulling the previous decision of the Commission. In the opinion of the EU Court, unlike the first two types of restrictions individuated by the Commission, those included in the in the turnover distribution agreements do not constitute abuse.
The partial annulment of the decision resulted in a reduction of the fine inflicted by the Commission, revalued thus at 4,125 billion euro. Nevertheless, this penalty is still the highest penalty that has ever been inflicted in Europe by a supervision authority on competition.
Ilaria Feriti