European Commission Fines Google $5.1B for Favoring and Pre-Installing Own Services on Android

[MacRumors]

The European Commission hit Google with a $5.1 billion fine today, stating that the tech company broke EU antitrust laws by striking deals with Android phone manufacturers to favor Google's services over rival services (via The New York Times).

Android P is the newest version of the software, set to launch this fall​

Specifically, the European Commission pointed towards the Google search bar and Chrome web browser coming pre-installed on Android smartphones like those made by HTC, Huawei, and Samsung. With these options already in smartphones when users purchase them, other services are "unfairly boxed out."

"Google has used Android as a vehicle to cement the dominance of its search engine," said Margrethe Vestager, Europe's antitrust chief. "These practices have denied rivals the chance to innovate and compete on the merits. They have denied European consumers the benefits of effective competition in the important mobile sphere. This is illegal under E.U. antitrust rules."

Now, Google has 90 days to ends these practices or face penalties of up to 5 percent of the worldwide average daily revenues of parent company Alphabet. In response, Google's European Twitter account confirmed that the company will appeal the Commission's decision.

.@Android provides choice. With Android, you have a choice of 24,000 devices, at every price point, from more than 1,300 different brands & with over 1 million apps available in the Google Play Store. #AndroidWorks More on our blog: https://t.co/dOXaQ6ZPT3 pic.twitter.com/kK8EHiAVqb - Google Europe (@googleeurope) July 18, 2018

Google CEO Sundar Pichai commented on the decision in his own blog post today, pointing out that Android phones come preloaded "with as many as 40 apps from multiple developers," not just Google. Users can delete them if they want and install their own choices after they purchase the smartphone.

According to Pichai, the EU fine "sends a troubling signal in favor of proprietary systems over open platforms." Pichai also notes that Android phones compete with iOS phones, a factor that isn't brought up in the ruling.

Today, the European Commission issued a competition decision against Android, and its business model. The decision ignores the fact that Android phones compete with iOS phones, something that 89 percent of respondents to the Commission's own market survey confirmed.

It also misses just how much choice Android provides to thousands of phone makers and mobile network operators who build and sell Android devices; to millions of app developers around the world who have built their businesses with Android; and billions of consumers who can now afford and use cutting-edge Android smartphones.

The European Commission has targeted Google previously, fining the company $2.8 billion last year for unfairly favoring its own services in Google search results. For the new $5.1 billion fine, the EU is said to be taking advanced measures to "rein in the clout" of American tech companies, but Google is not expected to back down from its appeal decision and has begun to populate a hashtag on Twitter -- #AndroidWorks -- against the Commission's fine. According to The New York Times, the case is now "likely to drag on for years."

Article Link: European Commission Fines Google $5.1B for Favoring and Pre-Installing Own Services on Android

 

[NexusUser]

Makes you wonder if they will target Apple and iOS for forcing Safari, Apple Maps, Apple Music, etc. on end users...

 

[Gorms]

Ouch. That'll sting. This bit:

"Now, Google has 90 days to ends these practices or face penalties"

I assume this can't be for devices already in the wild? Because we all know that that Android upgrade issue is going to make that task impossible.

 

[djcerla]

It will take much more than this to steer the Evil Empire into fair competitive habits.

 

[BootsWalking]

I wonder if the EU will look into the arrangement between Google and Apple where Google pays Apple billions each year to make Google the default search engine on Safari on iOS. This seems noteworthy considering the two companies combined are a dominant duopoly in the smartphone industry.

 

[cknibbs]

Even as an Apple guy I think this is pretty ridiculous. Google getting in trouble for having default everyday apps as their own services? It’s their OS!

Next thing you know Apple is getting in trouble for having the iTunes Store on their devices as the default.

 

[69Mustang]

Makes you wonder if they will target Apple and iOS for forcing Safari, Apple Maps, Apple Music, etc. on end users...

This was my first thought as well.

It will take much more than this to steer the Evil Empire into fair competitive habits.

What exactly do you think Google did wrong here? I'm not asking about your general feelings about Google (those are well documented). What's not competitive?

 

[Bornee35]

Even as an Apple guy I think this is pretty ridiculous. Google getting in trouble for having default everyday apps as their own services? It’s their OS!

it's not their phones though

 

[M.PaulCezanne]

Your choice of 24,000 devices that will send all of your personal and private data straight to Google and their advertising clients!

 

[69Mustang]

it's not their phones though

No company has to pre-install Google apps on their devices. They can all use Android without Google Apps. Amazon does it. All of China does it.

 

[Bornee35]

Makes you wonder if they will target Apple and iOS for forcing Safari, Apple Maps, Apple Music, etc. on end users...

Apple not only makes the software but the hardware as well. It's not anti trust if everything is your product.

 

[pika2000]

Users can delete them if they want

What a load of crap. Most of these apps are hard-coded into the firmware, and the only times they can be deleted is when the OEM themselves decide not to include them anymore in the next firmware. Either Pichai is lying, or he never use an Android phone.

 

[kirky29]

To be honest, I think they should chase Apple. The sooner they allow default apps the better.

 

[Boatboy24]

Even as an Apple guy I think this is pretty ridiculous. Google getting in trouble for having default everyday apps as their own services? It’s their OS!

Next thing you know Apple is getting in trouble for having the iTunes Store on their devices as the default.

Agree. How is this issue significantly different than packaging IE on a Windows PC?

 

[macduke]

Makes you wonder if they will target Apple and iOS for forcing Safari, Apple Maps, Apple Music, etc. on end users...

No. That is not the issue here. The issue was Google making deals with OEMs to install and set Google as default. Apple has been able to do this time and time again because they own the entire stack from hardware to software. It’s a wholly complete product that they put out.

At least these fines are starting to sting. For ages it seemed like these fines were only a million or two here and there which Google can find in their couch cushions. It’s pretty funny that this is starting to backfire because the whole point of Android was to make Google money by becoming the biggest mobile OS by market share by giving it away free and having everyone on the platform use Google services.

 

[Bornee35]

Agree. How is this issue significantly different than packaging IE on a Windows PC?

Because no one can confidently say that IE blocks out the competition. It's step 1 for installing the competition.

 

[Heineken]

Makes you wonder if they will target Apple and iOS for forcing Safari, Apple Maps, Apple Music, etc. on end users...

No, Apple doesn't have big enough marketshare for monopoly, google does.

 

[bbeagle]

Makes you wonder if they will target Apple and iOS for forcing Safari, Apple Maps, Apple Music, etc. on end users...

iOS is not a monopoly (i.e. on more than 50% of phones), so they can't target Apple for that.

 

[pika2000]

No company has to pre-install Google apps on their devices. They can all use Android without Google Apps. Amazon does it. All of China does it.

But Google’s certification and their dominance in the App Store market share forces most OEMs to play along with Google. Imo that’s the point of the EU regulation. If you are the dominant player, then there are things to follow. Look how the EU pressed on Microsoft on Windows and IE.

OEMs in China do not include Google Play simply because Google pulled out from China. All of the Chinese OEMs’ overseas handsets do contain Google Play.

 

[garylapointe]

European Commission Fines Google $5.1B for Favoring and Pre-Installing Own Services on Android

Just title seems idiotic, Google favoring itself.

I do not know how the laws in these cases should work, but it seems commonsensical that it should be okay. Especially if they are not forcing anyone to favor them and they can do what they want on their own devices. And if the users can delete the apps and change the preferences.

But it's okay for Google to pay Apple to be the first search engine choice?

 

[Bornee35]

No, Apple doesn't have big enough marketshare for monopoly, google does.

Apple offers a closed ecosystem from start to finish, that's not anti-trust.

 

[Nozuka]

Not surprising. Microsoft also had to pay alot of money for bundling the Internet Explorer with the OS.

 

[bbeagle]

Agree. How is this issue significantly different than packaging IE on a Windows PC?

Microsoft got caught for that a long time ago. In 2009, the EU said that Microsoft had to offer a choice. That agreement lasted 5 years. Since 2014, Microsoft is now allowed to make IE the default browser. If another lawsuit comes up, then they might be forced to remove it again.

 

[pete2106]

The BBC have reported that the fine comes down to three points against Google:

• it required Android handset and tablet manufacturers to pre-install the Google Search app and its own web browser Chrome as a condition for allowing them to offer access to its Play app store
• it made payments to large manufacturers and mobile network operators that agreed to exclusively pre-install the Google Search app on their devices
• it prevented manufacturers from selling any smart devices powered by alternative "forked" versions of Android by threatening to refuse them permission to pre-install its apps

The report acknowledges that Google allow third party browsers etc. to be installed but they force manufacturers to install and default to google apps by threatening to withhold access to the Play store and other services.

 

[keysofanxiety]

Makes you wonder if they will target Apple and iOS for forcing Safari, Apple Maps, Apple Music, etc. on end users...

This is not much different to the Microsoft antitrust case for IE way back when.

Apple make hardware and software. The two are combined. You buy Apple hardware, you buy the software. If Apple licensed their software to third party manufacturers, your argument would be applicable. As they don't, it's not.

Android and Windows are operating systems. Apple software is tied to the hardware.