Google has been formally charged with anti-trust violations by the European Union for allegedly favoring its Android mobile operating platform over other competitors. It’s the latest hit against Google by European anti-trust regulators, who have been chasing the company since 2010 for allegedly promoting its own shopping services in Internet searches at the expense of other companies.
“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,” said European Competition Commissioner Margrethe Vestager.
The EU also published a statement of objections it said had been sent to Google execs. In it, the company was said to have implemented a strategy on mobile devices to preserve and strengthen its dominance in general Internet search. First, the practices mean that Google Search is pre-installed and set as the default, or exclusive, search service on most Android devices sold in Europe. Second, the practices appear to close off ways for rival search engines to access the market, via competing mobile browsers and operating systems. In addition, they also seem to harm consumers by stifling competition and restricting innovation in the wider mobile space.
Google will now have the opportunity to respond to the commission. It has also released a strong public statement, denying the charges.
“Android has emerged as an engine for mobile software and hardware innovation. It has empowered hundreds of manufacturers to build great phones, tablets, and other devices. And it has let developers of all sizes easily reach huge audiences. The result? Users enjoy extraordinary choices of apps and devices at ever-lower prices,” read a statement posted by Kent Walker, Google SVP and general counsel.
“The European Commission has been investigating our approach, and today issued a Statement of Objections, raising questions about its impact on competition. 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…Our partner agreements are entirely voluntary — anyone can use Android without Google. Try it—you can download the entire operating system for free, modify it how you want, and build a phone…Our partner agreements have helped foster a remarkable — and, importantly, sustainable — ecosystem, based on open-source software and open innovation. 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 found guilty, Google could be forced to change its business model — which would be a significant blow to the company in Europe — and/or face a hefty fine. Those fines can reach up to 10% of a company’s revenue, leaving Google looking at a potential fine of up to $7.4 billion. A decade ago, Microsoft was hit with fines of almost $2 billion in its anti-trust dealings with the EU.