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E.U. Levels Antitrust Allegations at Google Over Android Apps and Google Services

April 15, 2015 - Written By Tom Dawson

Over the last six months or so, Google has been facing increasing pressure from the European Union, with the European Commission becoming more and more vocal over Google’s monopoly on search and now Android. Recently, we heard that the E.U. was preparing to level Antitrust allegations against Google concerning search as well as their alleged stranglehold on Android. Margrethe Vestager, the Danish politician now in charge of the E.U.’s Competition Commission has said that “If the investigation confirmed our concerns, Google would have to face the legal consequences and change the way it does business in Europe.”

The formal allegations levelled at Google cover two very big portions of Google’s business; search and mobile. Where search results are concerned, the European Union isn’t happy with how Google diverts search results to favored names when shopping online. Today, the E.U. is formally charging Google with what’s called a statement of objections. These investigations could lead to massive fines needing to be paid by Google.

The more interesting portion of today’s announcement was that the E.U. is “stepping up” a similar investigation on the mobile side of things, taking on Android. We all know that whether or not we buy a Samsung, LG, Motorola, Sony or an HTC device running Android we get Google services with it. That means access to the Google Play Store, Google Maps, Google Search and more, right out of the box. It’s the contractual obligations between Google and these companies that the E.U. takes issue with. Ms Vestager said that “Smartphones, tablets and similar devices play an increasing role in many people’s daily lives and I want to make sure the markets in this area can flourish without anticompetitive constraints imposed by any company.”

Google offers these services for free to manufacturers that wish to ship Android devices, however these manufacturers must give Google’s apps and service prime placement. That “Google” folder on your shiny new Galaxy S6? The one next to the prominent Play Store icon? Those are part of the deal Samsung and Co. enter with Google to use their services. It effectively makes sure that the average consumer will use these apps and services simply because they’re in front of them. While manufacturers are able to include apps, like Samsung is doing with Microsoft’s services they still have to give Google services prime placement.

As for forking Android from the Android Open Source Project, the E.U. is concerned that manufacturers are unable to ship devices using their own Android-based platform. Amazon’s Fire line of devices run a forked version of Android, which completely cuts them out of being able to use Google services at all, regardless of whether or not they want to. Google demands that partners ship a Google-compatible version of Android. For instance, if Samsung wanted to ship a Galaxy S6 with their own version of Android, they would be unable to also ship it with Google apps or services or indeed ship a Google-powered version of Android alongside of their own.

This push to require partners to give Google services like Google Maps, YouTube and the Play Store favorable placement over other alternatives or even allowing manufacturers to ship different versions of Android is what the European Competition Commission will investigate. More than likely, these investigations will end in a hefty fine for Google to pay, which could be upwards of €5 Billion. The most that the E.U. has fined anyone was Intel’s €1.1 Billion bill in 2009 for their hold over the computer processor market.

In Europe, Google has responded to increasing hostility by simply shutting up shop. After a new law was passed in Spain requiring publications to charge Google News for showing their articles – despite the fact that Google makes no money from advertising on Google News as there are no ads – Google simply closed Google News in Spain. This time however, with Google Search and Android in the firing line, it might be Google’s only option to pay a big fine, as we can’t imagine Google making huge changes to the way they operate either of these two major pillars of their business.