EU Officially Goes After Google's Android On Antitrust Grounds

from the where's-the-beef? dept

This was widely expected, but the EU Commission, led by Competition Commissioner Margrethe Vestager, has officially announced that it’s going after Google over some of its practices concerning Android. This comes just a day after Canadian antitrust officials went in the other direction, finding no evidence that Google’s activities stifle competition. The EU has a few specific concerns about Android:

The Commission’s preliminary view is that Google has 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.

I definitely worry about monopolistic practices by incumbent players crowding out startups and innovation, so I was keen to dig in on the details here, but they seem oddly… lacking. I’ve noted in the past that the EU tends to view antitrust through a fairly different lens than the US does, and perhaps that’s the issue here. This is a broad generalization, but for the most part, the US focuses on whether or not practices harm consumers. The EU tends to focus on whether or not a company is really big. I think the US standard makes a lot more sense.

Let’s dig in to the specific complaints raised by the EU, saying each of these practices violated antitrust laws:

requiring manufacturers to pre-install Google Search and Google’s Chrome browser and requiring them to set Google Search as default search service on their devices, as a condition to license certain Google proprietary apps;

Many people have compared this to the case against Microsoft from the early 2000s, in which it got dinged for making Internet Explorer the default. Of course, a quick retort on that is: where is Internet Explorer in the browser market today? It’s basically a non-entity, and it wasn’t because of any antitrust penalties (which were basically wrist slaps). And, either way it appears that the issue here with Google is that it requires all of its core services to be bundled together: so if you want to offer the Google Play Store, then you have to also offer the other pieces of the Google app suite so that they work well together. But, of course, this also doesn’t stop phone makers or service providers from adding their own apps as well. I now have a bloat-free Android phone running Cyanogenmod, but back when I had a Samsung S4 on Sprint, it came with a ton of bloatware from both Samsung and Sprint (and, frankly, all of it was useless and annoying).

Perhaps there’s an issue with making Google search the default, but is anyone actually harmed by having Google’s search as the (easily changed) default on an Android phone? It certainly seems like Apple’s iOS ecosystem is a lot more restrictive. At least with Google you can route around Google’s app store and sideload apps easily or use alternative app stores. I frequently use Amazon’s app store, for example.

preventing manufacturers from selling smart mobile devices running on competing operating systems based on the Android open source code;

This is the one prong (out of three) that at least seems worth investigating more. I can understand Google’s position — that if you’re offering Google’s suite of apps, you need to offer Google’s version of Android to make sure everything works together well — but this seems like an unnecessary condition for Google to include in those agreements. The simple fact is that most manufacturers are likely to want to go with a stock Android anyway, and just pile on their own customizations and bloatware. In most cases, there isn’t going to be that much desire for manufacturers to use an Android fork. But, if they do… so what? I don’t really understand why Google prevents manufacturers from choosing to offer different flavors of Android, but I’m also not sure that this is an antitrust issue.

giving financial incentives to manufacturers and mobile network operators on condition that they exclusively pre-install Google Search on their devices.

This one probably confuses me the most. This is just a business deal for installing software on phones. For years, Google paid Mozilla to be its default search in Firefox, and then Yahoo outbid it to become the default. That’s how business works. Google isn’t leveraging its market position here — it’s just doing a deal. The EU claims that its issue is “not with financial incentives in general but with the conditions associated with Google’s financial incentives, in particular with the condition that the financial incentive is not paid if any other search provider than Google Search is pre-installed on smart mobile devices.” But… isn’t that the nature of the deal? If you’re doing a business deal to be the exclusive search provider, then, shouldn’t you be the exclusive search provider?

It will obviously be worth watching how all of this plays out. The EU has made it clear for a while that it has it in for Google, so if I had to predict, this process won’t go well for Google.

Frankly, if I were Google, I probably would have dropped a lot of the exclusivity requirements. I know they’re in a race to see who will get access to the most data, but let the apps and services compete and see who wins out. Google’s app ecosystem does well because it tends to be pretty good. Google could have avoided at least some of this fight by just trusting its own services to win out, rather than pushing for certain defaults and exclusivities. Some others have made this point as well:

I’m pretty sure Google can survive and come out the winner. The best of its products — that ones that have the most users — are excellent. People won’t stop using Google Maps just because it isn’t preinstalled on their phones. It’s among the top 10 most downloaded applications in Apple’s App Store because iPhone users often prefer it to Apple’s own map software. Chrome is in the top 100 most downloaded apps even though it’s impossible to change the default browser in iOS from Apple’s Safari without “jailbreaking” the device to untether it from Apple support.

Google’s search engine, too, wouldn’t be dominant if it didn’t index more pages than competitors and produce better results. YouTube is a must-have app, while Google’s cloud office services are free, unlike, say, Microsoft’s, and they work just as well.

These are great, competitive products. They don’t really need the extra push from restrictive deals between Google and phone manufacturers. Google’s brand name is strong with those who buy Android phones, and, given a choice, they are likely to prefer Google products rather than spend time researching alternatives. The company may need to spend a bit more on advertising its products in a free-choice situation, but that won’t break the bank because the apps are already hugely popular.

But what Google should do, and what the EU should force it to do, are different questions. I’d much prefer that Google take a more open approach to these things, but I’m not convinced that we want bureaucrats deciding for the company exactly what Google’s approach on the mobile phone should be.

Filed Under: , , , , , ,
Companies: google

Rate this comment as insightful
Rate this comment as funny
You have rated this comment as insightful
You have rated this comment as funny
Flag this comment as abusive/trolling/spam
You have flagged this comment
The first word has already been claimed
The last word has already been claimed
Insightful Lightbulb icon Funny Laughing icon Abusive/trolling/spam Flag icon Insightful badge Lightbulb icon Funny badge Laughing icon Comments icon

Comments on “EU Officially Goes After Google's Android On Antitrust Grounds”

Subscribe: RSS Leave a comment
62 Comments
Uriel-238 (profile) says:

Re: Re: Re: 'Easily' changed ?

Maybe this is different than my two android devices.

The home-screen search widget was removable as per any other widget.

There is a hold-the-home-button access to Google Now (much like Siri or Cortana) which cannot be changed automatically, but when I asked “search for pancake recipes on DuckDuckGo” it did connect me with instructions to change my default Google Now search engine.

That’s a thing neither Siri nor Cortana will do.

So I think while Android certainly has its faults, and I gripe about them constantly, it’s not the worst of mobile OSes, especially in the regard of forcing search engines on people.

When I installed Mozilla Firefox for mobile, it asked me to swap out Google Now for Firefox Search — which was locked into Yahoo without any available change. I had uninstall Firefox entirely to get Google Now again.

Roger Strong (profile) says:

> I’ve noted in the past that the EU tends to view antitrust through a fairly different lens than the US does, and perhaps that’s the issue here. This is a broad generalization, but for the most part, the US focuses on whether or not practices harm consumers. The EU tends to focus on whether or not a company is really big.

I saw an argument on Slashdot that nicely summed up the European position:

In Europe we already tried allowing a winner-takes-it-all strategy where a very good leader keeps the monopoly over a (market/region/population), it was called an absolute monarchy.

It looks good for as long as the original manager (who reached the position as the best in a meritocracy) stays in place. It lasts for a generation, when the competent leader legates the role to their heirs, who may or may not be prepared to maintain the same level of quality service.

By that time, it is too late to displace the incompetent newcomers – all the network effects that entrenched the original leader as a monopoly are still in place and are too strong to overcome even when there are better alternatives, except by a disruptive process that redefines the rules of the game in full. I heard you Americans didn’t like absolute monarchies? You should then understand the EU’s position.

Mason Wheeler (profile) says:

Re: Re:

That is actually a surprisingly good point, considering how common it is–to the point of being a cliche–for Tom to found a strong company, his son Dick to keep it running, and his son Harry to run it into the ground.

Sometimes it doesn’t even take three generations. Take Apple, for example. It seems to be a binary thing: it’s prosperous when acting as Steve Jobs’s own private cult of personality, and directionless and impotent when he’s not at the helm. Both times.

JMT says:

Re: Re: Re:

It’s not a good point at all, because the people did not have the power to remove a monarchy once they realized they had a problem. You only have to look at the likes of IBM, Microsoft, BlackBerry, Yahoo, MySpace, etc to see that companies in a dominant market position have no guarantee of holding that position any longer than their customers want.

crade (profile) says:

Re: Re:

Where is the absolute monopoly?.. You have a metric ton of sucky competition in all areas. There are many sucky search engines, there are many sucky phones there are many sucky web browsers. There is nothing preventing competition in this space, and you can’t force companies make better products. Forcing the good ones to make worse products doesn’t help anyone.

Cerberus (profile) says:

Re: Re: Re:

Central to this problem is the network effect. This does not apply to all big companies, but it does apply to Google and Facebook. The result is that it’s hard for users to switch to a different company even if that company is better, because of the network effect. Without taking that into account, I don’t think any discussion on the presumed monopolies of Google and Facebook can be complete.

Ninja (profile) says:

They could make all the non-critical apps removable for sure. This would probably soothe anti-trust fellas. And help millions and millions of users get rid of the crapware.

I dream of a time when you’ll get your phone clean and install whatever you want just like PCs. Though that UEFI shit has got me pretty angry last time I had to deal with it.

nasch (profile) says:

Re: Re:

I dream of a time when you’ll get your phone clean and install whatever you want just like PCs.

I think the closest to that is the Google phones, like the Nexus 6. Pure stock Android, with nothing added. There are a bunch of apps preloaded of course, things like email, gmail, google maps, play store, clock, calculator, browser. But I would consider it just the basics of what a typical user would want to start with.

John Fenderson (profile) says:

Re: Re:

“They could make all the non-critical apps removable for sure.”

They can’t, actually. The stock Android that Google makes doesn’t do any of that — the issue is that the manufacturers have taken Android and modified it to do that sort of thing.

Since Android is open source, Google has no power to tell them to stop directly. They might be able to leverage the use of the Android trademark or the Google apps to force different behavior, but that’s not a quick fix.

Anonymous Coward says:

Dealing

That’s how business works.

How Google’s business works is what the EU is questioning.

Google isn’t leveraging its market position here

I don’t see how it isn’t.

— it’s just doing a deal.

Yes, it is most certainly dealing. How and what it is dealing are the issue. Ask a convicted drug dealer if “I was just doing a deal” is much of a defense.

Bergman (profile) says:

Re: Dealing

Suppose you shop at grocery store A. This means you are not spending money at grocery stores B, C or D.

One of the points that the EU seems to think makes Google an unlawful monopoly is that they don’t spend money at B, C or D either.

Would it be fair for you to spend $50 at store A, and then pay that same $50 (total $200) to B, C and D even though only A is giving you merchandise — and then, only $50 worth?

If not, why should Google have to do that? That’s how business works.

Mason Wheeler (profile) says:

In most cases, there isn’t going to be that much desire for manufacturers to use an Android fork. But, if they do… so what? I don’t really understand why Google prevents manufacturers from choosing to offer different flavors of Android, but I’m also not sure that this is an antitrust issue.

That one actually feels to me like a legitimate antitrust issue. The rest really don’t, though.

crade (profile) says:

I don’t get it.. So Google gets in trouble and Apple is somehow fine? Apple actively prevents other apps from running on the iphone and forces people to use it’s app store giving it a cut of every application that runs on the iphone.

This is fine, but preinstalling chrome isn’t? Isn’t safari also preinstalled (not that anyone uses it)? I’m beyond confused.

crade (profile) says:

Re: Re: Re:3 Re:

They block competitors from making competing app stores to sell applications to run on the iphone. They block competitors from making competing hardware that runs IOS. They block competitors from making competing Operating systems that run on IPhone hardware. They block competitors from making applications that run on the iphone at all unless they pay Apple first. There are far more legitimate anti-trust issues with the way apple tries to keep it’s entire market locked and under control than with google’s open version.

Anonymous Coward says:

Re: Re: Re:

As long as the built-in apps can be replaced with competing options, I think Apple is fine too. I gather they’ve made it possible to do this in newer versions of iOS, probably to fend off the potential antitrust allegations that were likely heading their way.

I’m actually a bit confused about this on Android – there are options to totally replace pretty much every aspect of Android with 3rd party options – just because it comes pre-installed with Chrome and Google search doesn’t mean the user can’t replace them… I’ve done so on numerous devices. Most of these are even downloadable from Google’s play store, but they offer easily sideloading and alternative app stores as well if one desires.

Samsung and other manufacturers have in the past provided their own replacements for some of the built-in android apps – but Google has improved their own offerings in each new release to the point where nobody wants to use anything besides the defaults.

In the grand scheme of things – the problem seems to be the licensing terms for manufacturers which is really more about trademarks and branding than anything else. Before Google started getting more stringent, various forks and flavors of “Android” were becoming a real problem. Manufacturers were creating deviations that claimed to be Android, but were very different, and in many cases abandoned by those manufacturers. This caused a huge fragmentation issue with Android, and made App compatibility a major issue as well as preventing proper security patches from being deployed.

Google recognized this problem, and received a LOT of bad press about it – thus forcing them to improve their licensing terms in an attempt to hold manufacturers to a higher standard. That did also include providing sane default apps that were secure, updated, and functional in order to prevent the fragmentation from devaluing the Android brand.

Anonymous Coward says:

Re: Re: Re:2 Re:

Right – but does apple at least allow competing apps in their app store now? For example, you can replace safari with chrome, the built in email app with another, siri with cortana, etc?

If not, then I apologize for my confusion – I thought I had read somewhere that Apple was making this easier, but perhaps not. I don’t use iOS devices, so I wouldn’t know.

Anonymous Coward says:

Re: Re:

Well, technically I’m buying the device because of the OS it can run, not the OS it comes with.

All of my “android” devices are running either rooted or 3rd party firmware (mostly CM).

If I could easily run 3rd party firmware on an iPhone, I would probably do so, as the hardware is pretty decent other than the shitty OS it comes with.

hegemon13 says:

Google Play Services

In my opinion, Google Play Services should really be the crux of an antitrust investigation, though it is touched on by second accusation you highlight above (which starts with “preventing manufacturers…”).

Basically, Google has made Google Play Services a required part of a usable Android experience. As I understand it, Play Services provides easier interaction from app-to-OS and app-to-app. Widespread reliance by developers on Play Services means that the effort to port apps to competing app stores (such as Amazon’s), has gone way up, and apps are less likely to appear in competing app stores. This makes the Google Play Store a must-have feature for an Android device.

Of course, if you want the Play Store or Play Services, you have to play by Google’s rules and use the official version of Android. And bundle their other apps with prominent placement on the home screen.

It seems to me the implementation of Play Services is the clearest example of antitrust, in which Google uses it’s dominance in one or more markets (OS, Android apps) to strongarm manufacturers into bundling and promoting other products or use OS versions they would not otherwise have chosen.

All those saying OEMs are free to create their own OS are being disingenuous. The whole reason antitrust comes into play is that Android and iOS are so entrenched and powerful that competition is nearly impossible. Google is the one who chose to open-source Android. They then used the dominance that gave them to implement proprietary services and restrictive contracts that leave manufacturers with little choice but to acquiesce to whatever contract demands Google makes.

Anonymous Coward says:

Re: Google Play Services

“It seems to me the implementation of Play Services is the clearest example of antitrust”

China would be the biggest rebuttal to your argument. Millions of Android devices sold, with more hardware diversity than western markets, and almost none have Google Play services?

Why? Because they’re blocked by the Chinese government.

hegemon13 says:

Re: Re: Google Play Services

That’s not a rebuttal at all. Saying that alternatives can compete with Play Services in a market where Play Services doesn’t exist means nothing. It also has nothing to do with antitrust.

The question is not whether alternatives exist at all. A company can be charged with antitrust without even being a monopoly, e.g.(Apple in the ebook pricing collusion case). One of the big no-no’s in antitrust is using your monopoly strength in one market to artificially expand your products in other markets. The combination of issue 1 and 2 above is a pretty clear example of that. Google says that no company who sells a Google Play device can make any device that uses any “unapproved” version of Android – an exclusivity agreement that is questionable in itself. It then uses it’s market dominance in the app store, OS and search markets to strong-arm manufacturers into accepting terms that expand the market for their other products. It is a requirement that an assortment of non-core Google apps be installed and included in a folder ON THE HOME SCREEN of any Google Play device. This includes such “critical” apps as as Play Books, Play Music, and other Google profit centers. If that’s not antitrust, it’s toeing awfully close to the line. It’s a heck of a lot more flagrant than the abuses that MS got nailed for in the 90s.

Whatever (profile) says:

Re: Re: Re: Google Play Services

For Google, they face the problem that this is their very basic business model. They want eyeballs, attention span, and most importantly DATA. They want to touch as many of the data points of your life as possible, and to use that information to sell you stuff – or show you the ads that sell you stuff at the highest click rates possible.

Android isn’t some altruistic open source gift to the world, it’s been a shrewdly calculated move to get first crack at searches, as voice search, as your mobile browsing data, your mobile location data, and so on. Android isn’t free, it’s just without apparent financial cost.

Forcing certain apps, making them the defaults, and allowing those apps to have free reign over your notification tray and such is critical to the android business model. It is also potentially an anti-trust issue.

It goes back to what I said when Alphabet came around. Google is trying very hard to be able to show that the units are broken up so that in this sort of situation, they can suggest that “android” people, “search” people, and “ad selling” people are three different businesses, not one combined force to push money to the bottom line. It’s going to be a hard sell!

Anonymous Coward says:

Re: Re: Re: Google Play Services

“That’s not a rebuttal at all.”

Why not? You argued “Google has made Google Play Services a required part of a usable Android experience” and I showed you a country (the most populous in the world) where Android device customers do not consider Google Services required.

The problem is not lack of usable alternatives it’s that most people prefer Google products, which isn’t a problem at all, it’s how markets function.

Anonymous Coward says:

Giant sucking sound to the East

Europe has been after big, rich American tech firms for a while now. This is just more of that. Maybe a European company should build a top-tier mobile OS and you know, compete. How can they claim monopoly when there are 2 other competitors, MS and Apple, not counting some lesser ones such as Tizen and Blackberry. Blackberry once owned the market, then Apple and now Android. Seems to me there is plenty of competition going on in this space. Just because the firms aren’t european is no reason to think the competition is unfair.

Anonymous Coward says:

Google Restrictions on Manufacturers

There was a case where Google stopped Acer from releasing a smartphone in China with a modified Android OS

http://www.theverge.com/2012/9/14/3335204/google-statement-acer-smartphone-launch-aliyun-android

IANAL, but could this be considered anti-competitive? Is allowing Google to dictate what Android OS modifications can run be good?

Add Your Comment

Your email address will not be published. Required fields are marked *

Have a Techdirt Account? Sign in now. Want one? Register here

Comment Options:

Make this the or (get credits or sign in to see balance) what's this?

What's this?

Techdirt community members with Techdirt Credits can spotlight a comment as either the "First Word" or "Last Word" on a particular comment thread. Credits can be purchased at the Techdirt Insider Shop »

Follow Techdirt

Techdirt Daily Newsletter

Techdirt Deals
Techdirt Insider Discord
The latest chatter on the Techdirt Insider Discord channel...
Loading...