Posted: October 20th, 2018
By: Nathaniel Reiff
Soon, there may be an exile of American tech companies in the European Union (“EU”). After a record 4.34-billion euro ($5 billion USD) fine imposed by EU antitrust regulators, Google has initiated an appeal claiming its Android mobile operating system did not stifle its rivals.
The appeal, filed with the General Court of the EU, comes after the European Commission claims the tech giant abused its market dominance since 2011. According to Reuters reporter Foo Yun Chee, “EU competition enforcers had said Google’s illegal practices included forcing [smartphone] manufacturers to pre-install Google Search and its Chrome browser together with its Google Play app store on their Android devices, . . . [and] also paid manufacturers to pre-install only Google Search and blocked them from using rival Android systems.”
Before the fine was levied, Google argued that its operating system has led to affordable phones prices and ultimately created competition with Apple. Many have analogized this conflict to the U.S. government’s clash with Microsoft for illegally tying its Internet Explorer browser to its Windows operating system in 1998.
“They have products that we all like and like to use,” EU Commissioner for Competition Margrethe Vestager told CNBC, “The only thing we don’t like is when they get to misuse their success and put in place illegal restrictions.”
It is projected that the appeal’s court may take several years before it announces its ruling. If Google loses, they may take the matter to Europe’s top court, the Court of Justice of the European Union, but only on points of law.
The appeal comes after the European Union enacted new legislation threatening companies, such as Google, with fines up to 4% of global revenues if they break the EU’s privacy rules and a similar penalty if they don’t remove terrorist propaganda from their platforms. The legislation, according to Fortune contributor David Meyer, “marks a new phase in a very long-running battle between European lawmakers and big U.S. tech firms, over the issue of extremist content.” Google was also fined by the EU in June 2017 for unfairly favoring its own comparison-shopping service.
It is certainly noble that the European Union’s goal is to protect consumers by “assuring them the benefits of competition.” It is equally reputable that Google still maintains its services in the EU despite the blatant lack of support from the governing body, possibly because Google provides more than 90% of the internet search market in most of the Union’s member states. Given the latest effort to push Google out of its dominant role, it will be interesting to see how this may impact American tech companies relation with Europe’s volatile political system moving forward.
Nathaniel Reiff is a second-year law student at Wake Forest University School of Law. He holds a Bachelor of Arts in Business Administration and a Master of International Business from the University of Florida. Upon graduation, he intends to practice corporate and tax law.