EU Fines Google Record €4.34B for Android Monopoly Abuse Through Bundling

On July 18, 2018, the European Commission imposed a record €4.34 billion ($5 billion) fine on Google for breaching EU antitrust rules through three separate illegal practices involving its Android mobile operating system. The penalty was the largest antitrust fine ever imposed globally, exceeding the Commission’s previous €2.42 billion Google Shopping fine from 2017.

Android’s Market Dominance

Android is by far the world’s most popular mobile operating system, running on approximately 80% of smartphones globally and holding over 90% market share in most European countries. Google developed Android and licenses it to phone manufacturers, ostensibly for “free.” However, the Commission found that Google used this market dominance to illegally extend its monopoly into mobile search and browsing.

Three Anticompetitive Practices

Commissioner Margrethe Vestager detailed three distinct violations of EU competition law:

1. Illegal Bundling of Google Apps

Google required manufacturers to pre-install the Google Search app and Chrome browser as a condition for licensing Google’s app store, the Play Store. Since the Play Store was essential for smartphone functionality—users expect access to apps—manufacturers had no choice but to accept Google’s bundling requirements.

This meant:

• Every Android phone with the Play Store had Google Search and Chrome pre-installed
• Competing search engines and browsers could not reach users as defaults
• Google’s mobile search dominance was guaranteed by contractual coercion, not product quality

The Commission found this was “illegal tying” under Article 102 TFEU—using dominance in one market (Android/Play Store) to advantage in separate markets (search/browsers).

2. Illegal Payments for Exclusive Pre-Installation

Google made substantial payments to certain large manufacturers and mobile network operators on condition that they exclusively pre-installed the Google Search app on their devices. These payments created financial incentives for the largest device manufacturers to exclusively install Google Search and exclude competitors.

The Commission found these “exclusive dealing” arrangements reduced competition by making it economically irrational for major manufacturers to pre-install competing search services even if they were superior products.

3. Illegal Prevention of Android Forks

Google prevented manufacturers wishing to pre-install Google apps from selling even a single smartphone running alternative “forked” versions of Android not approved by Google. Android is technically open-source, allowing developers to create modified versions optimized for different purposes.

However, Google’s contracts required manufacturers to sign “Anti-Fragmentation Agreements” that blocked them from developing or selling any devices running Android forks if they wanted to include Google’s apps on any other devices. This meant:

• Manufacturers who wanted to experiment with Android variants were completely foreclosed
• Google controlled Android’s evolution despite its open-source status
• Potential competition from improved Android versions was eliminated

Evidence and Market Impact

The Commission’s investigation, which began in April 2015, analyzed extensive evidence including:

• Contractual agreements between Google and manufacturers (Mobile Application Distribution Agreements and Anti-Fragmentation Agreements)
• Financial records of exclusivity payments
• Market data showing Google’s mobile search dominance
• Internal Google documents revealing strategic intent

The evidence showed that these practices had directly caused:

• Google’s mobile search market share exceeding 95% in most European countries
• Chrome’s browser dominance on Android devices
• Complete foreclosure of competing search engines and browsers
• Elimination of potential Android competition from forked versions

Commissioner Vestager’s Statement

“Today, mobile internet makes up more than half of global internet traffic. It has changed the lives of millions of Europeans. Our case is about three types of restrictions that Google has imposed on Android device manufacturers and network operators to ensure that traffic on Android devices goes to the Google search engine. In this way, 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.”

Google’s Response and Appeal

Google defended its practices, with spokesperson Al Verney stating that “Android has created more choice for everyone, not less.” The company argued that:

• Android’s “free” availability had expanded consumer choice
• Pre-installation agreements were voluntary
• Manufacturers could still include competing apps
• Apple’s iOS imposed far more restrictive controls

Google appealed the decision. On September 14, 2022, the General Court of the European Union largely upheld the Commission’s findings but annulled one aspect regarding “portfolio-based revenue sharing agreements” that Google had already ceased in 2014. The fine was reduced from €4.34 billion to €4.125 billion—a reduction of less than 5%.

Compliance and Behavioral Changes

The Commission ordered Google to end the illegal practices within 90 days or face additional penalty payments of up to 5% of Alphabet’s average daily worldwide turnover. Google was required to:

• Stop tying Google Search and Chrome to Play Store licensing
• End exclusivity payments for pre-installation
• Remove Anti-Fragmentation Agreement restrictions
• Allow manufacturers freedom to develop and sell Android fork devices

In response, Google implemented a “choice screen” for European users to select default search engines and browsers—though critics argued this minimally addressed the structural monopoly issues.

Significance for Mobile Ecosystem

The Android decision exposed how Google transformed a nominally “open” operating system into a monopolization vehicle. Key findings included:

The “Free” Android Strategy: Android was never truly free. Manufacturers paid through:

• Surrendering default positions to Google services
• Accepting Google’s data collection infrastructure
• Foregoing opportunities to pre-install competing services
• Sacrificing ability to develop alternative Android versions

Mobile Search Monopoly: While Google claimed search dominance resulted from product quality, the Commission proved it resulted from contractual coercion. Users never chose Google—manufacturers were forced to pre-install it to access the Play Store.

App Store Power: The decision revealed how control of an app distribution platform (Play Store) could be leveraged to monopolize adjacent markets (search, browsers, advertising). This “gatekeeper” power became central to subsequent digital markets regulation.

Broader Pattern of Monopolization

The Android fine was Google’s second massive EU antitrust penalty:

• 2017: €2.42 billion for Google Shopping search manipulation
• 2018: €4.34 billion for Android monopoly abuse
• 2019: €1.49 billion for AdSense exclusivity

Together exceeding €8 billion, these cases documented systematic abuse of dominance across search, mobile platforms, and advertising—proving that Google’s business model relied on monopolization, not innovation.

Impact on Global Tech Regulation

The Android decision influenced:

• EU Digital Markets Act designating “gatekeepers” and prohibiting self-preferencing
• US antitrust cases examining Google’s mobile search dominance
• Increased scrutiny of Apple’s iOS app distribution restrictions
• Recognition that “free” platforms can engage in anticompetitive behavior

The case established that platform control of essential infrastructure (app stores, operating systems) creates gatekeeper power that can be illegally abused to foreclose competition—a principle now central to tech platform regulation worldwide.