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"It is a very serious offense.It is a very serious illegal behavior," said Margrethe Vestager, European Commissioner for Competition, at a press conference announcing the decision. . But one big question remains: what does the decision mean for Google and other big tech companies? This could be the tip of the iceberg of global technology regulation, where Europe has done the job that the United States can not or will not pursue.
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Five billion dollars, that 's a lot of money, even for Google. Alphabet, Google's parent company, generated revenues of nearly $ 111 billion in 2017, of which about $ 32 billion, or 29%, came from its Google division. Alphabet 's profit totaled $ 12.6 billion for the year, making $ 5 billion 40% of its annual net business figure.
Still, the amount is a drop in the bucket compared to the overall financial situation of Alphabet. While the company also recorded non-recurring charges of $ 9.9 billion related to changes in US tax legislation, Google's success is only increasing: its net revenues have increased by 20% over 2016 and almost as much during the previous year. And like other major technology companies, Google is sitting on a huge pile of money: about $ 102 billion, of which $ 62.8 billion is held by foreigners. That makes $ 8 billion possible from the two antitrust fines – Google appealed the first decision, and indicated its intention to appeal to the new one, more of a disadvantage than an existential crisis. The Alphabet shares were trading only slightly lower following the announcement of the EU 's fine, suggesting that investors were not terribly worried, at least for l & # 39; now.
But there are long-term uncertainties. The first concerns how the decision will affect Google's business, and the effects that this could have on the technology industry and the people who use its services. The action of the EC would require Google to stop asking handset manufacturers to bundle its applications and services, and allow them to sell devices running on other versions of Android. Given that Alphabet's revenues still consist primarily of revenue generated by Google's advertising activities and that Mobile is the dominant platform for Internet users worldwide, the loss of these default installations could have an impact. on the future success of the company. Even so, the change would only affect new installations, so that all current Android devices – over 2 billion of them – would continue to operate as is, with Google services in a preferential position . If some of these users are moving to new devices, they might not disable Google services.
But the possibility of a variety of new Android platforms could loosen Google's grip on the mobile market. Google CEO Sundar Pichai reacted to the EC decision in a post titled "Android has created more choice, not less," suggesting that it might be more concerned about the erosion of the majority of the mobile operating system. Pichai argues that Android has enabled a diversity of mobile handsets at varying costs and features, but with the common ability to run the same Android software. Of course, it's exactly the question that the EC wants to let prosper even more than Google has made possible. The very homogeneity that Pichai points out as a benefit to the consumer has also benefited Google substantially.
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