This has taken political colours with President Barrack Obama almost terming it as protectionism.
Margrethe Vestager, the European Union’s commissioner for competition, has begun probing on Google’s perceived anti-competitive behaviour vis-a-vis its Android operating system.
Vestager has to prove and establish that Google has been abusing its dominant position by hindering competitors from developing Android variants, services and rival applications. If the answear to all three questions are a resounding “yes” then Google could find itself in a bit of a tight spot.
As per the European Commission’s Statement of Objections, Google is supposedly in breach of antitrust rules since:
- its requires manufacturers to pre-installGoogle Search and its Chrome browser;
- it requires them to make Google Search the default search engine on their devices, the compliance of which opens the doors for licensing some of its proprietary apps;
- by “preventing manufacturers from selling smart mobile devices running on competing operating systems based on the Android open source code;”
- by “giving financial incentives to manufacturers and mobile network operators on condition that they exclusively pre-install Google Search on their devices.”
Obviously, its Statement of Objections goes into more detail on each of the above points.
Of note is the fact that the commission has referred to an “Anti-Fragmentation Agreement,” which a company must sign if they want access to Google’s apps, which essentially prevents them from selling any device running an Android fork.
If further goes on to say, Google “has granted significant financial incentives to some of the largest smartphone and tablet manufacturers as well as mobile network operators on condition that they exclusively pre-install Google Search on their devices,” but fails to back it up with any figure linked to those incentives.
Although it notes that it has no issue with Google providing any financial incentives, it has a problem “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.”
Google was obviously very much prepared for this. For within seconds of the European Commission’s public release of the Statement of Objections, it released a response titled “Android’s Model of Open Innovation.”
In it Google has offered its counterpoint saying its practice of offering Android in a “careful way” to companies is “good for competition and for consumers.”
The probe by the European Commission has drawn the ire of many, especially in the U.S. In fact U.S. President, Barrack Obama has all but accused the European Union of protectionism.
In an article that appeared in Recode, President Obama said “sometimes the European response here is more commercially driven than anything else.” He went on to add, that “oftentimes what [are] portrayed as high-minded positions on issues sometimes [are] just designed to carve out some of their commercial interests.”
The thing is, Vestager prefers to work with the company than go against them and shut them down. Its previous investigation into Google Shopping has been chugging along for the last six years. Vestager prefers to prod them along with the threat of a ten-figure fine to persuade them to change their behaviour.
Significantly, if the two cases are combined, Google is likely to face an eleven digit fine of nearly $15 billion. So do expect a lot of fireworks, tons of arguments which will go back and forth, but ultimately both sides are likely to come to a negotiated settlement – perhaps in the next decade?