This week, Google will face the European Commission in a five-day court hearing, appealing a record $5.1 billion fine and a 2018 decision that casts doubt on the viability of the tech giant’s Android business model, media reports confirm.
In 2018, the European Union’s executive branch penalized Google €4.34 billion ($5.1 billion) for allegedly breaking antitrust regulations with its Android mobile operating system.
Google’s appeal to the EU General Court in Luxembourg, filed three years ago, is an attempt to overturn the punishment and the more serious penalty that came with it: modifying how the Android business functions.
In Luxembourg, the main problem at hand is Google’s mandate that forces Android device manufacturers to pre-install Google Search and Google Chrome in order to license the Google Play Store, which is considered a must-have software.
Google’s opposition to “Android forks,” or modified versions of the Android mobile operating system, is also being challenged in court, Barrons report.
If device manufacturers build or sell devices based on an Android fork, Google restricts them from licensing its proprietary apps, such as Search and the Play Store.
The tech giant’s arguments against the European Commission revolve around how Android gives European consumers more options, not fewer, and that Google is in fact up against Apple’s iOS for iPhone operating system.
Furthermore, Google believes that its economic strategy, which keeps Android open, has benefited European manufacturers and developers significantly.
Android has given people more options, not less, and has helped thousands of businesses succeed in Europe and around the world. Neither the facts nor the law supports this case, a Google spokeswoman stated in a statement.
Analysts will be keeping a close eye on the case, both for its own merits—such as how a verdict against Google could represent a new challenge for the company—and to gauge the mood of broader worldwide moves to rein in Big Tech.
Dan Ives, an analyst with broker and investment bank Wedbush, told Barron’s, I’m on pins and needles to see how the court handles this because it reflects a broader pattern in how they’re going to rule in other Big Tech matters over the coming years.
“The regulatory pressure in the EU is continuing to sneak up to the likes of Google, Apple, and Facebook (FB),” Ives added.
“It feels like it’s been notched up to the next level—not just because of the fines, but because of the potential changes to the business models that are now in the battle zone.”