BRUSSELS: The EU antitrust regulators hit Google with a record fine of 4.34 billion euros ($5bn) on Wednesday for using its Android mobile operating system to squeeze out rivals.

The US technology company said it would appeal the decision.

The penalty is nearly double the previous record of 2.4bn euros which the US company was ordered to pay last year over its online shopping search service.

It represents just over two weeks of revenue for Google parent Alphabet Inc and would scarcely dent its cash reserves of $102.9bn. But it could add to a brewing trade war bet­ween Brussels and Washington.

EU antitrust chief Margrethe Vesta­ger said she very much liked the United States, countering a reported remark by President Donald Trump that she “hated” the country. “But the fact is that this has nothing to do with how I feel. Nothing whatsoever. Just as enfor­cing competition law, we do it in the world, but we do not do it in the political context,” she said.

Google’s parent company Alphabet said in a regulatory filing it would accrue the fine in the second quarter of 2018.

“We are concerned that today’s decision will upset the careful balance that we have struck with Android, and that it sends a troubling signal in favour of proprietary systems over open platforms,” Google CEO Sundar Pichai said in a blog.

Ms Vestager also ordered Google to halt anti-competitive practices in contractual deals with smartphone makers and telecoms providers within 90 days or face additional penalties of up to 5 per cent of Alpha­bet’s average daily worldwide turnover.

“Google has used And­roid as a vehicle to cement the dominance of its search engine. These practices have denied rivals the chance to innovate and compete on the merits. They have deni­­ed European consumers

the benefits of effective competition in the important mo­­bile sphere,” Ms Vestager said.

Asked whether breaking up Google would solve the issue, a call made by a number of Google foes, she said she was not sure if that was the solution.

“I don’t know if it will serve the purpose of more competition to have Google broken up. What would serve competition is to have more players,” Ms Vestager told a news conference.

On concerns that Google might subsequently decide to charge for using Android, she said her ruling was not related to the way the company operated.

“This is not a judgement on a business model. There is still a possibility to monetise its operating system. Revenue from its app store is quite substantial,” she said.

Android, which runs about 80 per cent of the world’s smartphones accor­ding to market research firm Strategy Analytics, is the most important of a trio of antitrust cases against Google.

Regulatory action against tech giants such as Google and Facebook, with their entrenched market power, might lack sting, said Polar Capital fund manager Ben Rogoff, who has been holding the stock since its initial public offering and is broadly neutral on Google.

“The reality is that as long as they’re delivering great utility to their consumers, consumers will still use those platforms. If they do, advertisers will be drawn to those platforms, too, because the ROIs (return on investment) are very difficult to replicate anywhere else,” he said.

Published in Dawn, July 19th, 2018