European Commission Fines Google €4.3bn For Android Market Dominance Abuses
by Andrei Frumusanu on July 18, 2018 10:00 AM EST
Today the European Commission has announced that it has found Google in breach of EU antitrust laws and has fined the company €4.34 billion.
The original proceedings against Google formally opened in April 2015, and investigated Google’s business practices related to Android licensing between 2011 and 2014. In their investigation the EU determined that Google was in violation of EU rules prohibiting anti-competitive agreements and abuse of dominant market positions.
As detailed in the thorough press-release, Google was found to have engaged in a trio of illegal practices:
- has required manufacturers to pre-install the Google Search app and browser app (Chrome), as a condition for licensing Google's app store (the Play Store);
- made payments to certain large manufacturers and mobile network operators on condition that they exclusively pre-installed the Google Search app on their devices; and
- has prevented manufacturers wishing to pre-install Google apps from selling even a single smart mobile device running on alternative versions of Android that were not approved by Google (so-called "Android forks").
Furthermore in the press release, the Commission correctly details Google’s business model for Android, as it describes that the operating system was created in order for Google to be a part of the crucial shift from desktop PCs towards mobile devices. And, in turn, to ensure that its flagship product, Google Search, would feature predominantly in the mobile space. The Commission determined that starting in 2011 Google became dominant in the market for app stores for Android, and thus its practice of forcing manufacturers to preinstall the Google Search app was found to be illegal.
The tying of the Google Chrome browser into the list of required pre-installed application from 2012 onwards was also found to be abusive of its dominant market position.
The commission argues that pre-installation creates a status quo bias for users, as whatever default applications are included with a device are the predominantly retained ones by users, creating a significant barrier to entry for competing alternatives. Google forcing manufacturers to pre-install these applications thus reduced the ability of rival application developers to compete.
The investigation also found that Google offered significant financial incentives to device manufacturers to exclusively pre-install only Google Search across that manufacturer's whole device portfolio. The investigation is said to have shown that rival search engine providers would have been unable to counter-compensate a manufacturer for the loss of revenue from Google while still generating a profit of their own. The Commission found that this particular conduct was gradually lessened in 2013 and ceased as of 2014.
Finally, one of the bigger findings is Google’s obstruction of the development and distribution of competing Android operating systems (forks). As Android is an open-source operating system, in theory any manufacturer could just fork it and continue to develop it independently as they would see fit. While in theory nothing stops a manufacturer from doing this, in practice Google’s strict CTS requirements mean that any such fork would not be supported by any Google services, and as such be shut out of the main Android application ecosystem. Of particular note is that a manufacturer would lose all rights to bundle Google apps across all of its devices if it were to sell any alternative device with a forked OS.
Google’s counterargument to this was that the restrictions were necessary in order to avoid fragmentation; the Commission however found that Google had made no effort in trying to determine if Android forks would be compliant with the technical requirements of its own proprietary applications. The Commission also said that Google had made no credible evidence available that could demonstrate any technical failures in forks that would cause them to be unable to support Google’s apps.
The €4.34bn fine takes into account the duration and gravity of the infringements, and is based on Google’s revenue from search and advertising in the European Economic Area. The Commission decision requires Google to end its illegal conduct within 90 days or else face further fines of up to 5% of daily average worldwide turnover of Alphabet (Google’s parent company).
Google for their part is refuting the commision's anti-competitive findings, and has stated that they intend to formally appeal the EU's ruling.
Source: European Commission Press Release
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PeachNCream - Friday, July 20, 2018 - link
Apple is not free from problems, but if you're willing to pay the entry price, you do get a better overall experience than you can on a large number of android devices.peevee - Friday, July 20, 2018 - link
"It's getting nearly impossible for me to get a new phone, most phones are notched,"So, you prefer dead glass around your front camera instead of extra screen space used by status bar? WHY?!?!?
Tams80 - Wednesday, July 25, 2018 - link
Yes, because it gives somewhere to hold the damn device and makes it structurally stronger. More components can also be fit underneath.Xex360 - Wednesday, July 18, 2018 - link
Problem is just like with Intel, it's too late, just like AMD before, Nokia, Microsoft to name won't be able to compete anymore.damianrobertjones - Wednesday, July 18, 2018 - link
Welcome Google... Welcome to the world as per Microsoft 20 years ago.rocky12345 - Wednesday, July 18, 2018 - link
So is the EU now gonna go after Apple for how they enforce their own set of rules they have for the mobile network providers. Hell no one can touch a Apple device before it is sold to the customer so you end up with what Apple wants on their mobile devices. So you can be assured they will have everything Apple on them and nothing from the competition installed on their devices such as other web browsers etc etc etc. Then again it has been a long time since I seen a fresh out of the box Apple device so maybe this has all changed.I'm sorry but for me at least I would want the products that are made from the company that makes the OS such as the search functions and web browser etc etc. It will at least give the device half a chance to work properly out of the box. What I do hate is all of these device manufactures installing their own bloat ware on the device which slows it down or just makes it buggy quite often. If I buy an Android device I expect to get a Android experience from it not what some company thinks it should be.
An example would be changing the UI because some of them are very nasty to look at and can be very buggy. I like Samsung phones but I hate the bloatware they like to put on their devices. You can get rid of most of it but unless you remove their OS and install a clean Android into it you are still stuck with a lot of junk because they won't let you remove it which a lot of the time slows the device down somewhat.
So for some of this I have to side with Google on all of this but not all of it. I do think it is high time those EU money grabbers take a closer look at Apple though,they are the poster child for anti competitive behavior yet no one seems to care and they turn a blind eye towards their actions.
FreckledTrout - Wednesday, July 18, 2018 - link
You have some points on Apple but the real issue, to the EU, is when you license an OS to third parties and force those buying the OS to use/install certain applications. Apple does not license its OS to others. Also Apple does set Google search as the default. Sure Apple does some things one could consider monopolistic but I don't believe they will get fined under EU's antitrust laws as they do not meet any of the current criteria.rocky12345 - Wednesday, July 18, 2018 - link
I think one of the points I was trying to make is Google makes the OS as well as Apps for the OS which they would like to see installed on their OS and the devices so the end user gets to see Googles Apps first as well as have a way to get to the Google Play store which is pretty important as well because you need a way to install your own Apps form the play store. There is nothing stopping everyone from installing the software they like to use personally. I do like the idea of booting up the device the first time and it just works and has the needed software on it so I can use the device. I would prefer to have both the OS and Apps form the same dev that way when we first boot up we know it should work right and having maybe third party Apps installed might make for a bad first experience for the end user. I feel the same way about Windows I prefer having a set of programs from Microsoft on my first boot up and then I tailor Windows to my liking and most likely will not use those programs again but it was nice to be able to get on the internet and download the software I want to use. Without having the needed software my user experience would be a lot worse for sure.Like another person relied posted I guess Apple gets around all of this because they have a rather low market share in both i devices and OSX so the watch dogs pretty much do not care and whether that is done on purpose by Apple or not I guess only they would know for sure but I am going to guess that if they could they would like to have a i device and a mac system in every house hold around the world and have no others to compete with..That's the Apple way after all.
id4andrei - Wednesday, July 18, 2018 - link
Apple does not have a monopoly. They get to do what they want with their platform. If ios had android's marketshare it would be another story.rocky12345 - Wednesday, July 18, 2018 - link
You make a valid point I just dug up the market shares and was surprised that Android was so much higher than IOS for market share. I guess surprised because almost everyone I personally know has iPhone's as well as a lot of my customers that come to me for computer service. Tin foil hat time but maybe this is Apples way of controlling their market share if they only ship out so many devices and it keeps their market share a bit lower as well as keeps the watch dogs at bay.Like I said that most likely is not the case they probably only can make so many devices each quarter and when you look at Android eco system you got several companies making devices and being sold I am going to bet that's the reason right there and I am sure if Apple could they would make more i devices to sell but hey it's not like they are to worried about it since they are one of the richest companies around.