Google’s Android OS raises EU competitive concerns
Alphabet could be hit with another record fine from the European Union, this time for using its Android operating system to protect the market position of its applications and search engine on mobile devices by limiting device manufacturer’s choice of pre-installed applications, according to Reuters.
Citing unnamed sources familiar with the matter, Reuters reported that the EU Competition Commission has formed a new panel of experts to give a second opinion on the case and that a ruling could be issued by the end of the year if the second panel agrees with the initial conclusions of the commission.
Google and parent company Alphabet already ran afoul of EU regulators to the tune of $2.7 billion, in a case where the EU Competition Commission concluded that Google’s shopping search results unfairly favored its own shopping listings over matches from competing online retailers. That fine was announced last month, and Commissioner Margrethe Vestager said at the time that “Google has abused its market dominance as a search engine by giving illegal advantages to another Google product, its comparison shopping service.” The Android anti-trust fine is expected to be even larger.
In a summary of the Android-related accusations, the EU commission noted that Google’s Android has market share of 90% or more in most of its member states. While Android is an open-source system that can be modified to create “Android forks”, or independent, tailored versions of the OS, the EU commission said that its “concerns relate to the conditions for use of Google’s proprietary apps and services on Android devices, which are not open source. In particular, if a manufacturer wishes to pre-install Google proprietary apps, including Google Play Store and Google Search, on any of its devices, Google requires it to enter into an ‘Anti-Fragmentation Agreement’ that commits it not to sell devices running on Android forks.”
The commission went on to say that its “investigation showed that Google obliges manufacturers, who wish to pre-install Google’s app store for Android, Play Store, on their devices, to also pre-install Google Search, and set it as the default search provider on those devices. In addition, manufacturers who wish to pre-install Google’s Play Store or Search, also have to pre-install Google’s Chrome browser. Thereby, Google has ensured that Google Search and Google Chrome are pre-installed on the significant majority of devices sold in the [European Economic Area]. … The commission seeks to ensure that manufacturers are free to choose which apps they pre-install on their devices. This is especially important since the Commission’s analysis has shown that consumers rarely download applications that would provide the same functionality as an app that is already pre-installed (unless the pre-installed app is of particularly poor quality).”
The commission said that in terms of an Android anti-trust case, its “preliminary conclusion is that by imposing the above-mentioned conditions on manufacturers, Google limits manufacturers’ freedom to choose the most appropriate apps to pre-install. This strategy appears to protect and strengthen Google’s dominant position in general internet search, and adversely affect competition in the market for mobile browsers. The commission has evidence that smartphone manufacturers would wish to source at least some of the apps that they pre-install from other parties than Google.”
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