Google is going to court this week in an attempt to reverse a monumental $5 billion European Union fine imposed on it. The bloc also gave an antitrust order which aimed at the search giant’s ability to generate revenue.
The hearing will go on for five days at the EU’s General Court in Luxembourg. Google will have the opportunity to tell the judges that the European Commission was wrong to demand changes to contracts it deemed anti-competitive, where makers of smartphones running Android OS got into questionable contracts with the tech giant.
Vestager’s decisive actions
The Android case is one of three decisions that have been at the center of EU antitrust chief Margrethe Vestager’s bid to curb the growing power of big tech. She fined the Alphabet-owned unit $9.6 billion (more than 8.2 billion euros) in total and is still running probes regarding the company’s chokehold on the digital advertising market. The case will serve as a precedent for the US, where similar cases are under investigation, according to Tommaso Valleti, an economics professor at the Imperial College in London. Valleti advised regulators on the case when he served as the EU’s antitrust economist.
If the EU loses, it could make things a little worse
Valleti continued to say that despite making headlines, the investigations into Silicon Valley firms are relatively not common and if the commission loses the case, they could become even rarer.
The EU’s findings on contracts requiring Android phone makers to designate Google’s search and browser apps and services the default, when they want to license the Play Store. The contracts were deemed an illegal restraint, but Google counters saying the decision undermines a business model that provided the OS for free while generating ad revenue.
The company has built a massive fortune with revenues of $182.5 billion last year, thanks to these contracts, and doesn’t seem willing to open its Scrooge McDuck-ian vault to part with some of it.