EU’s €4.12B Record Fine Hits Google: Is Android Monopoly Crumbling?

TradingKey – On Thursday, Google suffered a setback in a major legal battle. A senior advisor to the European Union’s top court backed the EU antitrust regulator’s decision to fine Google €4.12 billion (approximately $4.74 billion). On June 18, Google (GOOGL) closed at $173.32, down 1.49%.

The EU accused Google of monopolizing the market through three actions since 2011: requiring smartphone manufacturers to pre-install Google Search and other applications; paying specific manufacturers to exclusively pre-install the Google search engine; and prohibiting manufacturers from using unapproved versions of Android.

In 2018, the European Commission initially imposed a fine of €4.34 billion, which was reduced to €4.125 billion by the General Court in 2022. Google appealed this ruling to the European Court of Justice.

However, on June 19th, Attorney General Juliane Kokott recommended dismissing Google's appeal and upholding the original ruling. Kokott pointed out that Google has maintained a dominant position across multiple markets within its Android ecosystem for an extended period and has locked in users through "network effects," effectively excluding competitors.

She also refuted Google's defense logic, arguing that its comparison with "hypothetical equally efficient competitors" is invalid and that its actual market position has created an unfair advantage.

The European Court typically adopts the opinions of its advisors, with a historical acceptance rate of approximately 80%; however, formal judgments will not be announced for several months. If the €4.12 billion fine ultimately takes effect, it could encourage other institutions to pursue similar lawsuits, placing greater financial pressure on Google.

This ruling may also compel Google to adjust its business model for Android systems, allowing greater competition from third-party applications and systems.