European Commission charges Google with abusing its dominate position in search
The Commission announced it had formally opened up an investigation into the Android platform, and Google’s agreements with its smartphone hardware partners
The European Commission today sent a ‘Statement of Objections’ to the U.S. search giant Google and has opened a formal investigation into Android. The Commission accuses Google of abusing “its dominant position in the markets for general internet search services in the European Economic Area by systematically favoring its own comparison shopping product in its general search results pages.”
The investigation into Android is centered on what one might call the Microsoft offense: having a large market share of the market, and using the dominance to push its own ancillary products such as Maps. The Commission spelled out three areas that it will investigate:
- whether Google has illegally hindered the development and market access of rival mobile applications or services by requiring or incentivising smartphone and tablet manufacturers to exclusively pre-install Google’s own applications or services;
- whether Google has prevented smartphone and tablet manufacturers who wish to install Google’s applications and services on some of their Android devices from developing and marketing modified and potentially competing versions of Android (so-called “Android forks”) on other devices, thereby illegally hindering the development and market access of rival mobile operating systems and mobile applications or services;
- whether Google has illegally hindered the development and market access of rival applications and services by tying or bundling certain Google applications and services distributed on Android devices with other Google applications, services and/or application programming interfaces of Google.
Google wasted little time responding via its Europe Blog, writing that “while Google may be the most used search engine, people can now find and access information in numerous different ways — and allegations of harm, for consumers and competitors, have proved to be wide of the mark,” wrote Amit Singhal, Senior Vice President, Google Search.
Google also defended its Android platform agreements with its hardware partners that require the installation of Google product features.
“Anti-fragmentation agreements, for example, ensure apps work across all sorts of different Android devices,” wrote Hiroshi Lockheimer, VP of Engineering, Android. “A(fter all, it would be pretty frustrating if an app you downloaded on one phone didn’t also work on your eventual replacement phone.) And our app distribution agreements make sure that people get a great “out of the box” experience with useful apps right there on the home screen (how many of us could get through our day without maps or email?)”
Complicating the matter is the issue, unspoken of here, of taxes – or should one say, the lack of taxes paid. Major U.S. tech companies have been accused of implementing tax strategies that often shift revenue from country in search of the lowest possible tax situation – something seen as business as usual in the U.S. but which has upset many Europeans who see these companies as playing by different rules than their European competitors. In this area, companies like Amazon and Apple are seen as equally guilty.
But Google’s situation is different because, like Microsoft before it, it has a dominate operating system.
The EC investigation into Android has no deadlines to meet, so this issue could hang over the head of Google for quite some time. But as we have seen with Google’s fights with German and Spanish media outlets, Google is likely to dig in their heels – a strategy that worked in Germany, but was far less effective in Spain where media properties reportedly lost only between 4 and 6 percent of their traffic after Google shutdown Google News in the country.