Google search empire stuck with $4.7 billion fine after losing final Android appeal in Europe

(CN) — The smartphone that put Google in millions of pockets also left it with one of Europe’s biggest antitrust fines after the EU’s highest court rejected the company’s final Android appeal Thursday.

The European Court of Justice dismissed Google and Alphabet’s appeal in full, leaving intact a 2022 lower court ruling that largely upheld the European Commission’s Android antitrust decision. Google had asked the bloc’s highest court to overturn that judgment or further reduce the 4.125 billion euro (about $4.72 billion) fine, down from the commission’s original 4.34 billion euro (roughly $4.97 billion) penalty.

The judges agreed with regulators that Google used Android not simply to build a successful mobile operating system but to protect its dominance in online search. “The appeal must be dismissed in its entirety,” the court wrote.

Google argued that users could still download rival search engines and browsers and that phone makers remained free to install competing apps. The court found that argument overlooked how people actually use smartphones. Most users rarely replace pre-installed apps or change default settings, giving whoever controls the default position a significant competitive advantage.

“An assessment as to whether conduct is abusive cannot be made in the abstract,” the judges wrote.

Agustín Reyna, director general of the European Consumer Organisation, or BEUC, which backed the Commission throughout the proceedings, called the judgment “a big win for Europe,” saying it sends “a very clear message” that dominant companies cannot use their power to shut out competition and limit consumer choice. He said Android users were steered toward Google Search and Chrome for years, leaving less room for rivals to compete, even those offering stronger privacy protections or more innovative products.

Sébastien Pant, BEUC senior officer for Competition and Digital Enforcement, said the reason is simple: “Pre-installation of certain apps, combined with status quo bias, has a significant impact on what consumers will end up using.” He added Google Search gained far less traction on Windows phones, where it was not pre-installed.

The commission’s investigation began after technology industry group FairSearch complained in 2013 that Google was using Android to cement its search dominance. Following a formal investigation opened in 2015, regulators concluded that Google had abused its market power by imposing three sets of restrictions on phone makers and mobile network operators.

Manufacturers that wanted the Play Store had to pre-install Google Search. Accepting Google Search also meant pre-installing Chrome. Companies licensing Google’s apps also could not sell phones running Android open source apps and services that Google had not approved.

Those conditions mattered because the Play Store was the gateway to the Android app ecosystem. Android’s core code was open source, but Google’s own apps and services were not. By 2018, around 80% of smartphones used in Europe and worldwide ran Android, according to the commission’s findings cited by the court.

Christian Bergqvist, an associate professor of EU competition law at the University of Copenhagen, said Google’s strategy only makes sense in light of the shift from desktop computers to smartphones. As search moved onto mobile devices, he said, controlling Android became critical to protecting Google’s search business and making rival mobile ecosystems far harder to build.

Konstantinos Stylianou, a competition law professor at the University of Glasgow School of Law, said the judgment gives regulators greater flexibility to assess connected business practices together instead of treating each one in isolation.

He noted that many of Google’s practices are now governed by the EU’s Digital Markets Act, which took effect in 2023 and sets advance obligations for the biggest technology platforms to stop them from favoring their own services.

In 2022, the lower court had set aside only one part of the commission’s case, finding flaws in its analysis of certain revenue-sharing agreements. It nevertheless upheld the findings on Google’s Play Store tying, Chrome tying and anti-fragmentation restrictions, concluding they formed part of a single strategy to protect Google’s search business.

The Court of Justice agreed: “That strategy consisted in attaching special conditions to the use of the Android OS, on the one hand, and to the use of certain apps and services, on the other.”

The commission welcomed the judgment, noting the EU’s highest court dismissed Google’s appeal in its entirety.

Google, meanwhile, maintains that the courts misread Android’s value. “Android provides more choice for everyone and supports thousands of businesses,” a Google spokesperson said. “This judgment fails to recognize our significant investment to ensure Android remains open, interoperable and free.”

The company said it changed its agreements after the commission’s 2018 decision and remains focused on innovation and openness for users, partners and developers.

Fernando Díez Estella, a commercial law professor at Universidad Nebrija in Madrid, said the judgment’s lasting contribution is recognizing behavioral evidence as a way to prove exclusion. “Behavioral biases are not assumptions replacing proof; they are empirical facts capable of supporting proof,” he said.

Instead of assuming consumers always act rationally, he said, the court recognized that competition in digital markets must be judged by how people actually behave, an approach likely to influence future disputes over default settings, self-preferencing and AI-powered interfaces.

Thomas Höppner, a partner at Geradin Partners who represented several interveners supporting the commission, said the ruling removes any lingering uncertainty over the commission’s theory of the case and should embolden regulators pursuing complex digital antitrust investigations.

“This endorsement, in turn, is a major milestone and will hopefully encourage the commission and national competition authorities to conclude important cases swiftly,” he said.

Ben Edelman, an independent researcher and consultant specializing in internet markets, said Google’s mobile application distribution agreements were central to its effort to make its own apps dominant.

“Google styled its dominance as consumer choice,” he said, arguing that restrictive agreements, hidden from public view for years, helped create that appearance. Edelman said the multibillion-euro fine is an important step but cannot fully erase the competitive advantage Google built over more than a decade.

Thursday’s judgment leaves Google with no further ordinary appeal within the EU courts, drawing the final curtain on a case that reshaped how Europe polices the power of Big Tech.

Courthouse News reporter Eunseo Hong is based in the Netherlands.