Google is in trouble in Europe again. Today the European Commission, the executive branch of the European Union,
Just a year ago, the European Commission leveled an antitrust complaint against Google over its search engine dominance that could result in penalties up to $6.4 billion, or about 10 percent of Google’s operating revenue. The new complaint, meanwhile, could strip the company of at least some power to dictate to device makers what apps they must include with their Android-powered hardware.
Google, European authorities allege, simply has too much power to push potential rivals out of the market.
Google denies any wrongdoing. “Android has helped foster a remarkable—and, importantly, sustainable—ecosystem, based on open-source software and open innovation,” Google general counselor Kent Walker said in a statement provided to WIRED. “We look forward to working with the European Commission to demonstrate that Android is good for competition and good for consumers.”
At the moment, however, the commission disagrees. It accuses Google of using restrictive contracts to retain anti-competitive dominance of the European market. Google, European authorities allege, simply has too much power to keep potential rivals out of the mobile market.
Open With an Asterisk
Going after Android may seem weird. Because it’s open source, any company cannot only include Android in their own products but create custom versions of it, as well. The catch is that many of Android’s flagship applications, including the Google Play store, Google Maps, and Gmail are proprietary. So while any manufacturer or carrier can ship a device with Android pre-installed, they have to get Google’s permission to include Google’s proprietary apps. And getting permission to include those apps means playing by Google’s rules. That’s where the EU sees a problem with Google’s behavior.
According to the complaint, Google requires companies that want to bundle Google’s apps with their products to make Google Search the default search engine on those devices. They’re even offered financial incentives to not even include any other search engines, European authorities allege. Would-be bundlers must also pre-install Google’s Chrome browser and are prohibited from using alternate versions of Android created outside of Google.
If European officials decide to crack down on Android, Google may be forced to release carriers and manufacturers from these contracts and allow them to set other search engines (think Microsoft Bing) and browsers (think Firefox) as the defaults on their devices. And that could deliver a blow to Google’s bottom line, since the company makes money from advertising through its search engine and other apps, not by selling Android itself.
Walker argues in a blog post published today that Android has made the mobile marketplace more competitive. He points out that manufacturers are still free to install software from competitors like Microsoft and Amazon.
He has also argued that the company faces more competition than ever, and that Google actually sends a huge number of people to its competitors. “The universe of shopping services has seen an enormous increase in traffic from Google, diverse new players, new investments, and expanding consumer choice,” he wrote in another post last August.
But that’s clearly not how the EU sees the situation. “At this stage, the Commission considers that Google is dominant in the markets for general internet search services, licensable smart mobile operating systems and app stores for the Android mobile operating system,” the European Commission said in bringing its accusation. Android, the commission says, holds about 90 percent of the mobile OS, search, and app store market across the continent. In other words, even if Google is sending traffic to competitors, it also has the ability to lock those competitors out.
Google Under Fire
Although the EU announced its formal investigation last year, the roots of its case against Google stretch back further.
In 2010, Oracle sued Google for its use of the Oracle-owned Java programming language on Android. That suit brought to light the contracts that carriers and manufacturers who want to sell Android-based products have to sign with Google. In 2013, a consortium of companies called FairSearch—which includes Oracle, Microsoft, and Nokia—filed a lawsuit against Google.
The bright side for Google is that consumers have pretty consistently chosen its search engine and browser anyway.
Although regulators in the US have dismissed antitrust concerns over Google’s search engine dominance in the past, and Canadian regulators just dropped their own investigation into the issue, the EU has taken a generally harder line against tech companies in recent years. The EU’s “right to be forgotten” rule has caused Google headaches since 2014, and its new privacy regulations could change the way many tech companies operate in the region.
And the company still isn’t entirely safe in the US—the Federal Trade Commission launched an antitrust investigation into Android last year.
The bright side for Google is that consumers have pretty consistently chosen Google’s search engine and browser in recent years anyway. And YouTube has become a steady moneymaker for the company on mobile. Google might be flexing its muscle to keep users in its ecosystem. But they’d probably still use Google regardless.