Google Claims Its Payments To Phone Makers Aimed To Give Android A Chance Against Apple

On the third day of a week-long hearing at the General Court of the European Union, United States based search engine giant Google said that its policy of payment made to phone makers for pre-installing only Google Search on the devices that they make does not aim to prevent competition in the market but is necessary for the company to ensure that Android seizes market share from Apple.

Alphabet’s Google said this on Wednesday while addressing the Europe’s second-top court and was trying to convince judges to dismiss a record 4.3-billion-euro ($3.7 billion) antitrust fine that has been imposed on it by the EU as well as an order from the European Commission that directs the company to loosen the grip on Android powered devices of the search engine.

The major concerns of the EU competition watchdog with Google were limited to the two types of agreement that the company makes with smartphone makers. One of the deals is on payments for pre-installing in smartphones made by phone makers only Google Search on their devices which is known as the revenue sharing arrangements (RSAs). The EU allege that this deal essentially shuts out other rivals from getting their applications preinstalled on smartphones.  

Google lawyer Assimakis Komninos told the court that the position of the company on the deal was different from what was being portrayed as. Komninos noted that the payments agreement made with phone makers simply aimed to encourage phone makers to provide a space in their devices to Android. The company noted that the phone makers were already making money from installing other apps.

“Google had to offer an offsetting revenue stream. An incentive to convince them to open up and adopt the Android platform. At the same time, the RSAs also helped them to keep prices down and compete more successfully with Apple,” he said.

“And obviously, Google was getting in return a promotional opportunity, sole preinstallation, which allowed it to invest in a free OS (operating system), a free app store and so on.”

Additionally, Komninos said, only 5 per cent of the total global market was covered by the RSAs.

The claims of Google were rejected by Commission lawyer Nicholas Khan.

“What concerned them was competitors gaining traction,” he said and the RDAs were “the pinnacle of Google’s interlocking practices”.

The court is expected to pass a verdict next year.

The case is T-604/18 Google vs European Commission

(Adapted from RTE.ie)

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