Trump claims EU 'taking advantage' with US$5b Google fine

Donald Trump

The European Commission has fined Google a record $5 billion over what it says was illegal restrictions on Android device manufactures and mobile operators in violation of EU antitrust rules.

Alphabet, which is scheduled to report financial results on Monday, said it would set aside money to pay the fine which would cut its second-quarter profit by about US$5 billion.

On Thursday, President Trump weighed in, tweeting out his criticism on the EU. The search firm further barred phone makers from vending devices that featured Android systems that had not been authorized by Google.

Cheered on by many who are concerned about Silicon Valley's dominance, Ms Vestager will not abandon her mission to tame the tech giants - and the likes of Google, Apple and Amazon will fiercely resist any regulation that they see as a threat to their lucrative business models.

The European Commission said that Google broke the law by requiring manufacturers to install Google Search and Chrome as the default or exclusive search engine and browser as a condition for licensing Google's app store.

The Commission said that Google obtains the vast majority of its revenues via its flagship product, the Google search engine. A journalist quoted Trump, who told European Commission President Jean-Claude Juncker at the G7 meeting last month: "Your tax lady really hates the U.S.".

The fine, which caps a three-year investigation, is the biggest ever imposed on a company by the European Union for anticompetitive behavior.

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Google immediately said it will appeal the ruling, arguing that its free operating system has led to lower-price phones and created competition with its chief rival, Apple.

The penalty is almost double the previous record of 2.4 billion euros which the US tech company was ordered to pay past year over its online shopping search service. The fine marked the second time in about a year that regional regulators have needled Google for its business practices.

Vestager said Google had shut out rivals by forcing major phone makers including South Korea's Samsung and China's Huawei to pre-install its search engine and Google Chrome browser, thereby freezing out rivals. "They truly have taken advantage of the US, but not for long!" Trying to regulate giants such as Apple, Google, Facebook, Microsoft and Intel, which have all received antitrust fines from the European Union in the last 10 years, requires a lot of resources.

Android is technically an open-source operating system that Google lets cellphone makers use for free.

GSMA, the global wireless carriers' trade body, welcomed the ruling, saying services developed by its members can now better compete with software vendors.

"If we don't negotiate something fair, then we have tremendous retribution, which we don't want to use, but we have tremendous powers", Trump said on Wednesday during a cabinet meeting at the White House.

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