The fact that the European Commission has issued a statement of objections against Google over the use of Android on phones, means that it has already established abuse to its own satisfaction and now wants to talk about how to stop it. The not entirely unexpected news came out of the European Commission on Wednesday.
The accusations are that Google Search comes pre-installed as the default search service on most Android devices sold in Europe, and that it has done the same with its Chrome browser, and that by offering cash incentives not to install others or not use any Android “forks,” Google is preventing competition.
The conclusions were a “no brainer” given that Android is on 90% of European phones which have a licensable operating system; that it has a 90% market share in search and a 90% market share of downloadable apps for Android. Those numbers are rarely achieved fairly within any neighboring markets.
We have been through this before with IBM, Microsoft and Intel in European anti-trust and no matter how Google wriggles, it will have to fix the problem or lose the right to operate in Europe. The key question isn’t whether or not Google is guilty, but what needs to happen to fix this?
Google will have to take away financial incentives for distributors to use Android and its apps, and also remove blocks from operators offering rival technology. A small fine once these steps have been agreed, in the order of $1 billion or so, to put off any other company going down this route, is almost inevitable.
It now gives Google a chance to directly answer the Commission’s evidence, but we have never seen the Commission back down once it has collected its evidence and made its submission. Microsoft took the case all the way through the superior courts of Europe, but was still found guilty and ordered to pay a hefty fine, court costs and fix its behavior.
The Commission said, “We believe Google’s behavior denies consumers a wider choice of mobile apps and services and stands in the way of innovation by other players, in breach of EU antitrust rules. These rules apply to all companies active in Europe. Google now has the opportunity to reply to the Commission’s concerns.”
Android is an open-source system which can be freely used and developed by anyone to create a modified mobile operating system. However, 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 said that Google has granted significant financial incentives to some of the largest smartphone and tablet manufacturers as well as mobile network operators on condition that they exclusively pre-install Google Search on their devices.