Google abuses dominance of Android to stifle competition and preserve its lead in search, says EC
The European Commission (EC) has formally issued an antitrust complaint against what it perceives to be Google’s abuse of the dominance of the Android mobile operating system.
Google is accused of tying manufacturers into deals that “preserve and consolidate” its dominance in Internet search, hinder the development of competing apps and browsers and damage rival operating systems, ultimately harming consumers.
The EC’s ‘Statement of Objections’ alleges that Android smartphone makers must preinstall Google and Chrome as the default search engine and browser as a condition to licence certain proprietary applications and are unable to create devices running other operating systems based on Android’s source code.
Google EC charges
“A competitive mobile internet sector is increasingly important for consumers and businesses in Europe” said Commissioner Margrethe Vestager, in charge of competition policy. “Based on our investigation thus far, we believe that Google’s behaviour 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.”
The investigation started in April last year, and the EC says Android is present on 80 percent of all mobile devices sold in the European Union and that its share of the search market is around 90 percent.
IDC recently predicted that Android shipments will grow from 1.17 billion in 2015 to 1.62 billion in 2020, pushing the company’s share of the smartphone industry from 81 percent to 85 percent.
Google has rejected claims that the dominance of Android is impacting consumers. It said that since its launch in 2007, the ability for manufacturers and developers to use a common mobile operating system has provided an unparalleled wealth of choice in devices and applications, while bringing prices down.
“We take these concerns seriously, but we also believe that our business model keeps manufacturers’ costs low and their flexibility high, while giving consumers unprecedented control of their mobile devices,” said Kent Walker, Google’s General Counsel. “That’s how we designed the model.”
It asserts that all agreements with manufacturing partners are “voluntary” and are necessary to recoup the significant costs of developing Android. Furthermore it says any company is free to download the Android source code and customise it, just like Amazon has done with FireOS, and that users themselves can install any applications they want – not just those from Google.
“Our partner agreements have helped foster a remarkable — and, importantly, sustainable — ecosystem, based on open-source software and open innovation,” added Walker. “We look forward to working with the European Commission to demonstrate the careful way we’ve designed the Android model in a way that’s good for competition and for consumers.”
If the EC does find any wrongdoing against Google, it has the power to impose a financial penalty of up to 10 percent of the previous financial year’s revenue. To give an idea of how expensive this could be, Google’s revenue from its core businesses rose 13.5 percent to $74.5bn (£52.5bn) in 2015.
Google’s search activities have long attracted the attention of Brussels, with the EC arguing that Google harms competition by systematically favouring its own shopping comparison services in search results.