Google will appeal, says EU ignored that Android competes against iPhones.
The European Commission today fined Google $5.05 billion (€4.34 billion) for violating EU antitrust rules, saying that “Google has imposed illegal restrictions on Android device manufacturers and mobile network operators to cement its dominant position in general Internet search.”
The commission said that Google is violating antitrust law by requiring phone manufacturers to pre-install the Google search app and Chrome browser “as a condition for licensing Google’s app store (the Play Store).”
Google also violated EU antitrust rules by “ma[king] payments to certain large manufacturers and mobile network operators on condition that they exclusively pre-installed the Google Search app on their devices,” the commission said.
Thirdly, Google allegedly ran afoul of EU rules by deterring manufacturers from using Android forks. Google “has prevented manufacturers wishing to pre-install Google apps from selling even a single smart mobile device running on alternative versions of Android that were not approved by Google,” the commission said.
DuckDuckGo, a search company that aims to provide more user privacy than Google, commented on the decision via Twitter. “We welcome the EU cracking down on Google’s anti-competitive search behavior. We have felt its effects first hand for many years and has led directly to us having less market share on Android vs iOS and in general mobile vs desktop.”
Google will appeal, says Android creates choice
The commission ordered Google and its parent company, Alphabet, to stop those practices. But Google said it would appeal the decision to a European court. “Android has created more choice for everyone, not less,” Google said in a statement to Ars. “A vibrant ecosystem, rapid innovation, and lower prices are classic hallmarks of robust competition.”
Google CEO Sundar Pichai also disputed the EC’s conclusions at more length in a blog post.
But EC Commissioner and competition chief Margrethe Vestager said that Google’s use of Android to cement the dominance of its search engine has “denied rivals the chance to innovate and compete on the merits,” and “denied European consumers the benefits of effective competition in the important mobile sphere.”
Today’s fine stems from a commission investigation that began in 2015. The EC said:
Google’s practices have denied rival search engines the possibility to compete on the merits. The tying practices ensured the pre-installation of Google’s search engine and browser on practically all Google Android devices and the exclusivity payments strongly reduced the incentive to pre-install competing search engines. Google also obstructed the development of Android forks, which could have provided a platform for rival search engines to gain traffic. Google’s strategy has also prevented rival search engines from collecting more data from smart mobile devices, including search and mobile location data, which helped Google to cement its dominance as a search engine.
Pichai accused the EC of ignoring the fact that Android phones compete against iPhones and that Android helps “thousands of phone makers and mobile network operators” build and sell smartphones. Android phone users can easily install other applications, even if they’re not pre-installed by manufacturers, he noted. The Google-imposed requirements that the EC objected to help keep costs low for hardware makers, Pichai wrote:
The free distribution of the Android platform, and of Google’s suite of applications, is not only efficient for phone makers and operators—it’s of huge benefit for developers and consumers. If phone makers and mobile network operators couldn’t include our apps on their wide range of devices, it would upset the balance of the Android ecosystem. So far, the Android business model has meant that we haven’t had to charge phone makers for our technology, or depend on a tightly controlled distribution model.
The EC argues that Google could ensure that its apps work well on Android phones without preventing hardware partners from producing alternatives. Today’s “decision does not prevent Google from putting in place a reasonable, fair, and objective system to ensure the correct functioning of Android devices using Google proprietary apps and services, without however affecting device manufacturers’ freedom to produce devices based on Android forks,” the EC said.
Google facing several EU actions
Last year, the EC issued a €2.42 billion (~$2.82 billion) fine to Google for “abus[ing] its market dominance as a search engine by giving an illegal advantage to… its comparison shopping service.” The EC ordered Google to give rival comparison shopping services a greater presence in search results, and says it is “actively monitoring Google’s compliance with that decision.” Google’s appeal of the shopping decision is pending.
The EC isn’t done examining Google’s business practices, saying that it “continues to investigate restrictions that Google has placed on the ability of certain third-party websites to display search advertisements from Google’s competitors.”