According to foreign media reports, Alphabet's stock price fell on Wednesday, affected by the news that EU officials will hit the company with "negative consequences" and fine it $11 billion for abusing its dominant position in the Android mobile operating system. The Financial Times reported on Wednesday, citing sources, that EU antitrust commissioner Margrethe Vestager will make a ruling on this in the coming weeks. The specific amount of the penalty is still unclear, but the European Commission has the authority to fine Alphabet up to $11 billion.
After the news came out, Alphabet's stock price plunged more than 1% during the trading session on Wednesday. At the close of trading, the company's stock price stabilized slightly, down $2.78 from the previous trading day, a drop of 0.24%, closing at $1,136.88. Based on this closing price, Alphabet's market value is approximately $794.3 billion. Due to growing concerns about Alphabet's technology monopoly, the European Commission, the EU's antitrust agency, has previously launched three antitrust investigations against the company. Critics and lawmakers have been advocating for the breakup of dominant technology giants such as Google, Amazon and Facebook. However, so far, the biggest threat to Silicon Valley still comes from Europe. Alphabet warned investors last year that the European Commission's investigation into the company could end in 2018 and that the company could face a huge fine. Last June, after a seven-year investigation, the European Commission ruled that Google abused its search engine market dominance and provided illegal advantages to other Google products (comparison shopping services), and therefore issued a 2.42 billion euro (about 2.7 billion U.S. dollars) fine to the company. Prior to this, the largest antitrust fine issued by the European Commission was a 1.06 billion euro fine imposed on chip giant Intel in 2009. The European Commission began investigating Android in 2015. In the contract signed between Google and mobile phone manufacturers, the company required the latter to pre-install a folder. This folder, which appeared on the homepage of the mobile phone, contained 11 applications. Vestager has previously said that Google has suppressed innovation by making it more difficult for other apps to gain user attention. She said, "By requiring device manufacturers and operators to pre-install their own apps, rather than enabling them to decide which apps to pre-install, Google may have blocked one of the main channels for new apps to be noticed by users." Google has responded to this statement. The company said that consumers have the right to decide which app to use. However, some operators and hardware manufacturers do not agree with Google's point of view. An anonymous European telecommunications industry executive said, "How can we compete with Google when users don't even know about competing products?" Google's relationship with Android is different from Apple's relationship with iOS. Google doesn't make all Android phones, so third parties such as phone makers and carriers that sell their own branded phones can publicly complain about Google. Android's antitrust lawsuits in Europe are partly rooted in Google's fraught relationship with European telecom operators. European telecom executives said regulators' push for antitrust lawsuits against Google was the result of constant lobbying by operators. Telecom executives believe that Google's promotion of its own apps makes it difficult for them to promote their own video or email apps, limiting their ability to sell ads and weakening their voice in revenue-sharing negotiations with Google. Android phone makers also complained that it was difficult for them to differentiate their devices from those of competitors because they could not freely choose which apps to pre-install on their devices. Google executives responded that carriers and phone makers were not restricted from pre-installing their own apps on phones. If carriers or phone makers did not want Google apps, they were not forced to pre-install them. So far, neither Alphabet nor EU officials have commented on the report. |
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