EU's Historic Android Antitrust Fine Did Little To Stop Google: Report

Advertisement
Advertisement

The European Commission's historic antitrust fine issued to Google earlier this year over the technology juggernaut's abuse of its Android operating system conducted with the goal of stifling its app rivals is doing little to level the mobile software playing field, new reports indicate. French Internet search startup Qwant is just one of many companies claiming they're still essentially blocked from competing with Google Search within the Android ecosystem, casting doubt on the effectiveness of the EC's antitrust ruling.

A slap on Google's wrist

Following the EC's decision that Google is now in the process of appealing, the company begrudgingly agreed to start allowing original equipment manufacturers to make heavily modified versions of Android — also known as "forks" — without losing the ability to pre-load them with first-party apps such as Gmail, Google Assistant, Search, Chrome, and Play Store. As of late October, OEMs interested in doing so within the European Economic Area have to pay license fees for Google apps which were previously free, something the EC ruled was anti-competitive. However, the change also put a stop to existing projects promising some third-party Android developers a fighting chance against Google. E.g. Qwant previously agreed to a partnership with Huawei that would have seen the Chinese tech giant launch an Android handset with the French search engine instead of Google but the fall changes to the operating system's licensing terms injected significant uncertainty into the partnership and essentially placed it on indefinite hold.

Advertisement

Qwant co-founder Eric Leandri is describing the current state of affairs as "crazy," suggesting the EC's antitrust ruling against Google was just a slap on the tech juggernaut's wrist, a sentiment that has already been circulating the industry from the moment the political bloc made its decision public in mid-July. Whereas Google was actively preventing manufacturers from installing most competing services on their Android devices in the past, it's now requiring them to pay a license fee for every handset that uses its operating system and a customized app suite, e.g. one that offers Qwant instead of Google Search. In practice, that makes any significant production run of devices with rivaling apps pre-installed cost millions of extra dollars, which is something no manufacturer can be expected to pay and once again constitutes anti-competitive behavior, Mr. Leandri claims.

Coupled with the fact that Google controls by far the most prevalent Android app marketplace on the planet and also owns the world's largest digital advertising operation, third-party developers aren't particularly optimistic about their chances to compete with any one of its services. Mr. Leandri only sees hope in additional antitrust rulings being issued on the Old Continent and beyond but antitrust watchdogs are generally slow to react to change and are even having issues with enforcing existing verdicts. The record $5 billion fine Google was given in the Android antitrust case is presently being appealed, much like the $2.7 billion fine the EC gave to the company last year over its abuse of Search conducted for the purpose of promoting its online price comparison service. Both will likely take many years to be resolved, as indicated by previous high-profile antitrust cases involving the EU's competition watchdog. E.g. Intel was hit with a then-record $1 billion fine in 2009 over its business practices in the chip market but has yet to actually pay it and is still appealing the ruling, having most recently won another review of its case last year. Google is expected to embrace a similar level of resistance to the EC's ruling and has already indicated as much, completely dismissing the very notion that its business practices pertaining to Android and Search are predatory, something many members of the industry such as Yelp and Qwant previously argued, with the EC being in agreement.

New troubles looming in the U.S. and abroad

Advertisement

Google's issues with European regulators did not go unnoticed in its home country and the Federal Trade Commission is presently reviewing the cases with the goal of determining whether some of the transgressions attributed to the company on the Old Continent also constitute violations of U.S. antitrust law. The move comes at a time when Google is already far away from the Trump administration's good graces, with several high-profile members of the government, including the President himself, repeatedly accusing the Alphabet-owned company of being biased against right-wing ideologies and systematically censoring millions of conservative voices on the World Wide Web. That particular issue was one of the main subjects of last week's congressional hearing starring Google Chief Executive Officer Sundar Pichai who was grilled by stateside lawmakers on the company's approach to political topics and a variety of other subjects, including the fact that a Google Search query for the term "idiot" returns dozens of images of President Trump. At the same time, the Democratic party is still pressing Google over the role its services played in the Russian disinformation campaign seeking to influence the outcome of the 2016 presidential election.

Both sides of the political spectrum in the country are also appalled by Google's recent decision to attempt returning to China with a censored version of Search blacklisting terms such as "human rights" and "student protests" as part of a secretive Project Dragonfly, though that particular initiative was reportedly killed several days back, largely due to the public outcry it generated after its existence became public knowledge. At the same time, the European Competition Commissioner Margrethe Vestager is probing Alphabet's subsidiary on a third antitrust front – the one pertaining to its massive digital advertising network and the company's policies that discriminate against rivaling solutions by discouraging marketers from using them along with Google Ads, previously known as AdWords. Coupled with recent privacy scandals, including the one that potentially exposed personal data of tens of millions of Google+ users and contributed to the firm's decision to kill off its struggling social media network for good, Google presently isn't in an ideal position for continued sustainable growth — something investors are always craving — as its future brings many uncertainties, both in the U.S. and abroad.