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EU to Fine Google $5 Billion

EU to Fine Google $5 BillionEU to Fine Google $5 Billion

Google will be fined about €4.3 billion ($5 billion) by the European Union over apps for Android mobile devices, setting a record for antitrust penalties, according to a person familiar with the EU decision.

The penalty—the same amount the Netherlands contributes to the EU budget every year—is due to be announced by EU Competition Commissioner Margrethe Vestager in Brussels, Bloomberg reported.

The EU’s decision would bring the running total of Google fines to $6.7 billion after last year’s penalty over shopping-search services. It could soon be followed by more fines from a probe into online advertising contracts.

Google has built a massive business of banner and videos ads, thanks largely to its central role on Android devices. Google will account for a third of all global mobile ads in 2018, according to research firm eMarketer, giving the company around $40 billion in sales outside the US Google risks losing that traction if it is forced to surrender its real estate on millions of Android phones.

Google Chief Executive Officer Sundar Pichai had a call with  Vestager late Tuesday for a so-called state of play meeting, a usual step to alert companies of an impending penalty, according to one of the people, who asked not to be named because the discussion is private. The probe targets Google’s contracts with smartphone manufacturers and telecoms operators.

The European Commission exceeds last year’s then-record €2.4 billion penalty following an investigation into Google’s shopping-search service. Google owner Alphabet Inc. and the commission both declined to comment on the Android fines.

Despite being a record fine, Alphabet generated about the same amount of money every 16 days in 2017, based on the company’s reported annual revenue of $110.9 billion for the year.

 

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