European Union regulators hit Google with a record 4.34-billion euro (nearly $6.7-billion Cdn) antitrust fine on Wednesday for using its Android mobile operating system to squeeze out rivals.
The penalty is nearly double the previous record of 2.4 billion euros that the U.S. tech company was ordered to pay last year over its online shopping search service.
The fine represents just over two weeks of revenue for Google parent Alphabet Inc. and would scarcely dent its cash reserves of $136 billion. But it could add to a brewing trade war between Brussels and Washington.
“Google has used Android as a vehicle to cement the dominance of its search engine. 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,” EU antitrust chief Margrethe Vestager said in a statement.
Google said it would appeal the fine.
Vestager also ordered Google to halt anti-competitive practices in contractual deals with smartphone makers and telecoms providers within 90 days or face additional penalties of up to 5 per cent of parent Alphabet’s average daily worldwide turnover.
The EU enforcer dismissed Google’s argument of competition from Apple, saying the iPhone maker was not a sufficient constraint because of its higher prices and switching costs for users.
Android, which runs about 80 per cent of the world’s smartphones according to market research firm Strategy Analytics, is the most important case out of a trio of antitrust cases against Google.
Some major Android device makers, including Samsung, Sony, Lenovo and TCL, declined to comment on the EU case.
Lobbying group FairSearch, whose 2013 complaint triggered the EU investigation, welcomed the ruling.
A third EU case, which has not yet concluded, involves Google’s AdSense product. Competition authorities have said Google prevented third parties using its product from displaying search advertisements from Google’s competitors.