Business Technology

Google's fine for breaching anti-trust laws could help other companies thrive

3 min read

18 July 2018

Tech giant Google’s multi-billion fine from the European Commission for monopolising the internet could dramatically improve the user experience of businesses – and spark innovation.

The tech giant has been fined £3.87 billion for breaching anti-trust laws and abusing its market position.

The European Commission (EC) said Google had been restricting mobile phone manufacturers that used its Android mobile operating system to ensure it drove traffic to its own search engine. By doing so it has denied “rivals a chance to innovate and compete”.

The EC said Google had acted illegally in cementing its dominant position in internet search. It required Android handset and tablet manufacturers to pre-install the Google search app and web browser Chrome and making payments to large manufacturers and mobile network operators that agreed to exclusively pre-install the Google search app on their devices.

It also prevented manufacturers from selling any smart devices powered by alternative versions of Android.

Google maintained it would appeal, declaring that Android had “created more choice for everyone, not less”.

Mark Skilton, professor of practice in information systems and management at Warwick Business School, said the fine had fitted the crime in this “long-running dispute of market dominance and manipulation”.

He suggested: “Google has always been a contradiction, in that it is a market facilitator that also wants to control that market. Google claims it has to compete with other big players and that swapping to an alternative search service is ‘one click away’.

“However, in my view it is its locking up around 80% of mobile devices with pre-installed Google Android software.”

He said consumers did not have “real choice” and were locked into just one vendor’s world view of the digital economy.

“It must be remembered Google ‘defines the market’ and is not just an innocent bystander. Google claims it is a free market for users, but that’s just not true in practice,” Skilton said.

“Granted, as we see in the telecoms market, network operators want to protect their billion-dollar investment in the infrastructure that enables all this internet to work, but it’s when it becomes a monopolistic control from the supplier to the end user that it becomes a problem.

“The internet is in urgent need of moving to its next level of evolution, which will be a more distributed and edge-based world.

“It is being seen with the rise of the internet of things that are multiplying the number of connections to smart homes, products, transport and everything else – this will bring a more open market.”



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