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July 17, 2018updated 18 Jul 2018 9:28am

Google in Last Ditch Effort to Avoid Colossal Android Antitrust Fine

European Commission alleges Android abuse by Google

By CBR Staff Writer

Google’s CEO Sundar Pichai was due to speak to the European Union’s competition Commissioner Margrethe Vestager Tuesday in a last ditch effort to avoid being hit with an anticipated record-breaking antitrust fine for the conditions it imposes on mobile manufacturers using Android.

That’s according to two sources close to the investigation, speaking to Bloomberg. They claimed the pending European Commission fine, believed to be announced on Wednesday, will be larger than last year’s record EUR2.4 billion (£2.1 billion) penalty in Google’s shopping-search investigation.

android pGoogle Antitrust Allegations: What’s the Beef?

A 2016 investigation by the European Commission raised three main issues.

Search Dominance

1: Google forces mobile phone manufacturers to set Google Search as a default search provider and pre-install Google’s Chrome browser if they want to run Play Store on the devices: “The Commission seeks to ensure that manufacturers are free to choose which apps they pre-install on their devices. This is especially important since the Commission’s analysis has shown that consumers rarely download applications that would provide the same functionality as an app that is already pre-installed,” the EC said at the time.

Big Forking Fight

2: Android is open source and can be freely tweaked to create a modified mobile OS (a so-called “Android fork”). The European Commission alleges that if a manufacturer wishes to pre-install Google proprietary apps, including Google Play Store and Google Search, on any of its devices, Google requires it to enter into an “Anti-Fragmentation Agreement” that commits it not to sell devices running on Android forks. With Play Store so dominant, this is a major concern, it says: “Google has also closed off an important way for its competitors to introduce apps and services.”

Exclusivity

3: Finally, the EC alleges that Google has granted “significant” financial incentives to major smartphone manufacturers and mobile network operators, on condition that they exclusively pre-install Google Search on their devices: “The Commission takes issue not with financial incentives in general but 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.”

Best browser for Android

The Android case was triggered by a 2013 complaint by lobbying group FairSearch whose members at the time included Oracle and Microsoft.

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Shopping Headache

Google’s remedy for the shopping antitrust case remains contested, with the Competition Commissioner sending rivals a list of questions earlier this year to see if they had benefited from the remedy.

FairSearch claims Google’s current remedy proposal has made matters worse and does “nothing to address the demotion half of Google’s illegal Conduct—the penalty algorithms, such as Panda, that are prone to demoting competing services.”

In June last year Vestager said: “Google abused its market dominance as a search engine by promoting its own comparison shopping service in its search results, and demoting those of competitors. What Google has done is illegal under EU antitrust rules. It denied other companies the chance to compete on the merits and to innovate. And most importantly, it denied European consumers a genuine choice of services and the full benefits of innovation.”

Google has been contacted for comment.

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