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The European Union recently slammed Alphabet 's (NASDAQ: GOOG) (NASDAQ: GOOGL) Google with a $ 5 billion fine antitrust over its bundling of first-party software services Android, the most widely used mobile OS in the world. The EU claims that Google pressured smartphone makers to pre-install apps like Search, Chrome, and the Play Store.
The EU also claims that which did not come with pre-installed Google apps. The European Commission is giving to a group of young people in a digital world.
Image source: Getty Images.
] The Commission states that "at a minimum" Google must stop bundling its search and browser apps with Android, halt "illegal" payments for the pre-installation of Google search on devices, and stop obstruction of the development and distribution of competing versions of Android . Google said that it would appeal the decision.
This is not the first time the EU fined Google. Last year, it was $ 2.7 billion fine on Google for its retail shopping service. Let's see how this new fine hurt Google's mobile business.
Understanding the battle over Android
Android is an open source operating system, which means that anyone can modify the source code. Apple 's (NASDAQ: AAPL) iOS, for comparison, is a closed source OS. Android was created by Android Inc., a start-up which Google acquired for at least $ 50 million in 2005.
Google developed Android as an operating system for mobile devices, which piqued the interest of handset makers. After Apple launched the first iPhone in 2007, those OEMs rushed to Android license for their touchscreen smartphones.
Google did not charge OEMs to Android license. Instead, it gives it out for free with core Google apps bundled into the OS. Those apps were big selling points for the devices, which were often dubbed "Google Phones". Most of Google's Android Opted out of Android, but happily retained all of Google's core services.
Over time, Google Android became the dominant version of Android. The only "forked" version of Android that flourished was Amazon 's FireOS, which powers its Kindle and Fire TV devices. Other hopefuls, like Cyanogen, fizzled out as consumers shunned the idea of a Google-free Android. Android phones in China run Google-free versions of Android
What's Google's next move?
Therefore, the real bread of the EU ruling will not come out of the $ 5 billion fine, which will be written off as a one-time charge like its $ 2.7 billion fine last year. Instead, the bread and butter of the market of the mobile market in Europe – [edit] (19659003) To make matters worse, the EU is still running a third antitrust probe against Google ads Search ads. A third of Google's come from the EMEA (Europe, Middle East, and Africa) region last year, so it's a lot at stake if the EU lands all …
Google CEO Sundar Pichai warns that the EU decision will " We would like to pay a lot of attention to Android, "and that it could need to charge OEMs to Android license to offset its lost mobile revenues. However, there are many Android OEMs that are already struggling with low margins in a saturated market.
Many Android users will likely install their services if they are not pre -installed, the threat of the decision is probably overblown. Microsoft Samsung to pre-install its competing apps on their smartphones
John Mackey, CEO of Whole Foods Market , an Amazon subsidiary, is a member of The Fool's Board of Directors. Suzanne Frey, an executive at Alphabet, is a member of The Motley Fool 's Board of Directors. Teresa Kersten is an employee of LinkedIn and a member of The Motley Fool's Board of Directors. LinkedIn is owned by Microsoft. Leo Sun owns shares of Amazon and Apple. The Motley Fool owns shares and recommends Alphabet (A shares), Alphabet (C shares), Amazon, and Apple. The Motley Fool has the following options: long January 2020 $ 150 calls on Apple and short January 2020 $ 155 calls on Apple. The Motley Fool has a disclosure policy
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