Isobel Asher Hamilton* says the EU’s competition watchdog has handed Google a record fine for using its dominant position in the marketplace to quash competition.
Google was fined a record €4.3 billion (A$6.7 billion) last week by the European Union’s competition watchdog, which accused it of using its dominant position in the marketplace to quash competition.
The European Competition Commissioner, Margrethe Vestager took issue with three specific trade practices, which authorities found to be illegal.
Here they are in detail:
- Requiring manufacturers to preinstall Google’s browser and search apps for access to the Play store
Google required phone manufacturers to preinstall Google Search and its browser app, Chrome, to access Google’s app store, Google Play.
Speaking in Brussels, Vestager said preinstallation was an advantage that could create a “status quo” bias, in which people are far more likely to use search apps and browsers already present on their devices and are unlikely to download competing apps.
To illustrate the point, the European Commission said more than 95 per cent of all search queries on Android in 2016 were made via Google Search, whereas more than 75 per cent of search queries on Windows Mobile devices were made via Bing, the default Windows search engine.
During the investigation, device manufacturers told the commission that Google Play was a “must-have” app, which consumers expect to have preinstalled, especially since they cannot lawfully install it themselves.
“Google’s practice has therefore reduced the incentives of manufacturers to preinstall competing search and browser apps, as well as the incentives of users to download such apps,” the Commission concluded.
“This reduced the ability of rivals to compete effectively with Google.”
- Paying manufacturers to exclusively preinstall Google Search
Google made payments to certain (unspecified) large manufacturers and mobile network operators on condition that they exclusively preinstall the Google Search app on devices, the Commission said.
The Commission found that rival search engines would have been unable to match the financial incentive offered by Google.
Google started this practice in 2011 but began to slowly roll it back in 2013 after it became aware of the Commission’s scrutiny.
- Preventing manufacturers from selling devices running alternative versions of Android
Google blocked manufacturers from selling devices running alternative versions of Android, known as Android forks, not approved by the company.
To preinstall Google’s apps — including the Play store and Google Search — on their devices, manufacturers had to commit not to develop or sell even a single device running on an Android fork.
Vestager pointed out that Android forks were not a “remote possibility from a theory book,” using Amazon’s Fire OS as an example.
The Commission found that while manufacturers were interested in Amazon’s operating system, Google’s restrictions meant it could launch only on Amazon devices.
Google argued that restrictions on Android forks were necessary to prevent “fragmentation” of the Android ecosystem, but the Commission assessed these arguments to be “not well-founded.”
“These technical requirements cannot serve as a smokescreen to prevent the development of competing Android ecosystems,” Vestager said.
“Google cannot have its cake and eat it.”
* Isobel Asher Hamilton is a tech fellow at Business Insider in London. She tweets at @Hamilbug.
This article first appeared at www.businessinsider.com.au.
