Antitrust probe into Android and Google Shopping launched by EU Commission


As was expected after an internal Google memo was leaked yesterday, outlining an imminent antitrust probe into the company's Android and Google Shopping products, earlier today the EU Commission came out with an official Statement of Objections (SO), accusing the search giant of antitrust practices.

As the aforementioned Google memo points out, an SO is not a final finding, and does not prejudge the outcome of any investigation. In other words, Google can now respond to the accusations and those can be dropped by the EU Commission entirely, or a settlement can be reached before things turns ugly.

But what exactly is Google accused of? Two things, as mentioned. Firstly, the probe will try to establish whether associated agreements with the use of Android and Google's ever-growing layer of proprietary apps aren't anti-competitive and detrimental to consumers. Preliminary investigation by the Commission suggests that they might be, as they could have hindered the development of alternative mobile services and rival platforms (including Android forks like Amazon's Fire OS) due to Google's requiring (or incentivizing) manufacturers to exclusively pre-install the giant's own solutions.

Secondly, the EU Commission, again based on initial investigation it carried out, alleges Google of essentially rigging its own search algorithms so that its Google Shopping service is unfairly and prominently over-represented in search results. The search giant has also been accused of not applying the same system of penalties that it uses with competing shopping services to its own solution, thus pushing back rivals down in general search rankings. Google Shopping is a service that allows users to compare prices of products between different vendors. 

While Google has weeks to respond to these accusations formally, the company has already published two pieces on its official blog addressing both. In the case of Android, the company argues that its operating system has been instrumental in spurring competition and choice, and lowering prices. As for the Google Shopping allegation, the company is using hard numbers and a bunch of graphs to point out that despite its dominant position as a search provider, its service is considerably less popular in major markets such as Germany, France, and the UK.

In general, it seems like Google feels it has a very strong case on both counts, at least based on the now twice-mentioned internal memo. Whether the company is simply trying to project confidence, or really feels it has done nothing wrong, remains to be seen. 

source: Europa [1], [2], [3], Google Blog [1], [2]

FEATURED VIDEO

19 Comments

1. Pattyface

Posts: 1658; Member since: Aug 20, 2014

Hmm I reported this a while back and was told it didn't have anything to do with phones so they dismissed it.. Now there's an article??? Anyways.. This seems just as silly as the split up that Microsoft had to do in the 90s

3. Crispin_Gatieza

Posts: 3147; Member since: Jan 23, 2014

What say the "Microsoft is a monopoly" trolls today? Life's a biitch ain't it?

5. VZWuser76

Posts: 4974; Member since: Mar 04, 2010

The difference there was MS was keeping other search engines from being preloaded by the OEMS. Here Google is only requiring their apps to be preloaded as well. What MS did was exclude apps in favor of their own, Google isn't doing that. In fact, before I had a close to stock Android device, with skins like Sense and Touchwiz, while Google's apps were included, they weren't necessarily the default app. Both Sense and Touchwiz had browsers that were their own, gmail wasn't the default email app, and they also had their own calendar, contacts, messaging, and dialer apps as default, just to name a few. So there is the difference, one company blocked rival apps from being included at time of sale, where the other company is simply requiring their apps be included at the time of sale, even if they aren't the default app.

8. Crispin_Gatieza

Posts: 3147; Member since: Jan 23, 2014

An anti-trust suit is the same regardless of the details. Is murder by stabbing any less heinous than a gunshot through the temples?

10. tedkord

Posts: 17408; Member since: Jun 17, 2009

Silly analogy is silly. Is jaywalking as heinous as murder?

11. VZWuser76

Posts: 4974; Member since: Mar 04, 2010

A more correct analogy would be death due to premeditated murder vs death by accident or self defense. One is felony murder which is illegal, the others are accidental death and justifiable homicide, which are not crimes. What Google has done hasn't given them an advantage, since as I said, on phones with Touchwiz or Sense that do comply with Google's guidelines, they have non Google apps in place as the default in things such as browser, email client, messaging, contacts, calendar, and dialer. They haven't blocked any competitive apps from being installed. If they were, how do explain MS apps being installed as the default on the new Galaxy S6? All they are doing is requiring their apps be installed at the factory, they don't need to be the default app, only pre installed. This is no different than having carrier apps pre installed on a device.

13. Crispin_Gatieza

Posts: 3147; Member since: Jan 23, 2014

The Sherman Anti-Trust Act does not distinguish as you posit. The language of "excluding competition" is all-encompassing. It's up to the judiciary to interpret the application of the law. Because of this, we had Ma Bell broken up in the mid 80s while an appeals court reversed the Microsoft breakup decision. I'll gladly continue this intelligent, adult dialogue with you but somebody tell tedkord to grow a brain.

15. tedkord

Posts: 17408; Member since: Jun 17, 2009

Now that's irony!

17. VZWuser76

Posts: 4974; Member since: Mar 04, 2010

And that's just it, they aren't excluding competition. They aren't saying that you can't have this app or that one on a device. What they are saying is you need to include our apps on there. How does having their apps on there exclude the competition? The competition's apps would already be on there. If anything, what you and others appear to be asking is for Google to allow OEMS to exclude their apps from their own OS. How does that figure? And before you bring up that they're locking down Android, no they're not. Are they locking down their own version of Android that's tied to the Playstore? Yes, because that stuff is outside of Android and is proprietary. AOSP, on the other hand, is still free for anyone to use as they see fit. What you seem to be saying is Google needs to make their apps and services, including the Playstore, open source and free to use by anyone as well. But the Playstore isn't part of AOSP Android, it's part of Google's proprietary suite of services, and therefore separate. It isn't present in AOSP, period. And that's what most of the people making noise about this are wanting, access to the Playstore without having to preloaded Google's services.

18. Crispin_Gatieza

Posts: 3147; Member since: Jan 23, 2014

The report I read on WSJ was about Google not allowing other search providers. You and I may be arguing from different vantage points.

20. VZWuser76

Posts: 4974; Member since: Mar 04, 2010

I don't know how they could come to that conclusion. Yahoo search, Bing search, and Ask.com are all available in the Playstore, as are things like Mapquest and HERE maps that are competitors to Google maps. And like I said before, if they're talking about browsers, the only time I see Chrome as the default browser is on Nexus and Motorola devices. Otherwise, each OEM uses their own browser.

21. VZWuser76

Posts: 4974; Member since: Mar 04, 2010

And besides that, there have been Android phones with Bing as the default search, IIRC the Verizon Galaxy S1 variant and the HTC Merge both did. And like I said, the Galaxy S6 has MS's apps on it.

22. elitewolverine

Posts: 5192; Member since: Oct 28, 2013

Competing Browsers were available to consumers for windows as well. MS IE did NOTHING to stop a consumer from loading up a browser. I think the hinderence comes in the fact of how they are going about the deals. I dont see it as antitrust, but hey I am not the court, but we can all show for and against them. Personally i think it will be a fine, and nothing more. What may be brought up is how Google continues to put more and more into Google android and discontinue work on integral parts of AOSP or what people may consider integral. Interesting earlier in this convo you brought up Calender etc as non-default apps. There is a reason for that, I got to dig up the sources once more, but in essence stock AOSP Calendar is pretty much useless for integration (without tinkering with it if i am not mistaken comes with no apis to sync even with google), email - gmail couldnt integrate well with other emails it was literally a gmail only app (though i think it could if google wanted to do it earlier), etc. Again i dont see it as antitrust, but its fun to play the devil advocate, plus Google isnt on my nice list so i will stab em when i can just for the hell of it and for dialog as well.

23. VZWuser76

Posts: 4974; Member since: Mar 04, 2010

I never said competing browsers weren't available for the consumer to install, I said they blocked them from being pre installed by OEMS on PCs. The problem is, both in PCs and mobile, you can't expect a person to have to install something after the fact. But I never said the completely blocked the use of competing browsers being installed, just pre installed. As far as AOSP, yes they probably are putting less time into it and more time into Google Android. Before they didn't, I remember reviewers complaining about how they needed to pay more attention to Android (Google's) because they were acting like an absentee landlord. So they needed to make it more about their Android for awhile. The thing is, I really don't have a problem with MS, just with everyone saying that MS and Google's situations are the same, which they're not. On the browser/shopping issue, I'm sure they're probably guilty of favoring results, but I think that happens with most search engines. You can usually type certain things in and get almost predictable results depending on which one you're using. I find it interesting it's an issue considering where things were looking at going before the net neutrality decision came down. They don't like a search engine prioritizing certain results, but they wanted companies to pay to prioritize their speed on the internet.

24. elitewolverine

Posts: 5192; Member since: Oct 28, 2013

Yes but do you honestly think, google hasnt used strong arm tatics in having said startup use their services instead? That is what they are going to be getting at. Not that there is a clause, but the tatics used. And while they are not the same, they are still very similar. Then again, think of it this way to. MS is a closed source, so why shouldnt they be able to dictate when gets preinstalled? Where as Linux by nature is open so i dont think legally even if google wanted to, they could lock it down. But they are doing their best by removing older working api's in favor of googles api only approach. Google has been doing this more and more and more. To the point that AOSP will be a shell and companies will be either faced with spending lots of cash to have a 'good' product, or just buy into googles offer

25. VZWuser76

Posts: 4974; Member since: Mar 04, 2010

Considering like I said certain earlier Android devices shipped with Bing as the search provider, I think that also says something. But AFAIK, they have never prohibited apps from being pre installed on an Android device. And again, even if one of their services was the default app, it's not hard at all to change that. Yes MS is closed source, and for the most part, so is Google's Android. Their services are proprietary, and to be eligible to use GA, you need to have their services installed (even if they aren't the default), and you can't change the core OS too much either (for manufacturer skins). One thing I will guarantee you though, if the Playstore wasn't part of the equation, no one would care about using Google's Android. I'd bet money on that. Now you have said that AOSP is essentially a shell, like that's a bad thing. That was essentially the whole point of AOSP, something you could make entirely your own, with a Linux base. Two reasons I think that google has gone this route. First, early on people complained how Google handled certain things, like calendar and contacts for instance. Well take them out of the equation and let the OEM or user set it up the way they want. And its not like the people using AOSP are your everyday Joe who doesn't know how to get or create what they need, so that isn't a problem. Second, google has put a lot of time and effort into refining those kind of things, so why shouldn't they be allowed to keep that for themselves. Apparently they weren't part of the Linux core, so it was something they added to it early on, and now they've decided to keep it for their own implementation. Why is that bad? The thing I think people keep overlooking is that AOSP is open source, Google's Android, it's services including the Playstore, are not. Just because they are the ones doing the work on AOSP, does that mean that every thing they come up with needs to go into AOSP? AOSP should be a blank canvas with only the bare minimum of apps and services to make it run, and leave the customization up to the person or company modifying it.

26. elitewolverine

Posts: 5192; Member since: Oct 28, 2013

We are still going in circles. It doesn't matter if Google is open source or why it did it. If they are making bad deals that stifle competition even if it is LEGAL, they can still be in antitrust for monopoly reasons. Just like it wasn't Illegal for MS Close source to tell OEM's no, you cannot f with it. But when you start to control a vast majority, you are no longer enabling competition you are killing it. So it is not really whether it is legal or not, it is whether or not their practices have hurt the industry in some way once you hit a 'majority' stake. Just look what Google did to the Kenya startup. They lied about data so that people would use google services instead. If you think this was their first bad practice....that is funny. I don't think they should be slammed with anything. But it has become quite clear that Google has used the Playstore as the gateway to everything. I could almost guarantee Google has used the Playstore as a way to 'strong' arm people into the service agreement. I like ruthless tatics imo, I don't care that they have, but we cannot call one evil and one good.

27. VZWuser76

Posts: 4974; Member since: Mar 04, 2010

So because they have reached a certain amount of market share, they should make everything available to anyone who wants it? Because that is the only other alternative. You say they're forcing people to do what they want, but they aren't. These companies have options besides Google. They're not the greatest options, but they do have options. They can create a completely new OS, they can forgo the Playstore, fork Android and create their own appstore, or they can partner with MS. It's not like Android happened overnight, they had to build it, and then Google acquired them and continued to build it out further. Just as any other company would have to do if they decided to create their own OS. There is nothing keeping companies like Samsung, HTC, LG, or anyone else from either partnering with MS's WP or creating an entirely new OS, like Samsung is doing with Tizen. But these companies has chosen to be Android OEMS. And if you look at companies who have forked Android, many if them have their own app stores, with Amazon being the most popular. But their are other less famous ones out there as well. They may not have as many apps as the Playstore, but the Android Market (as it was originally called) didn't have as many apps as Apple's appstore at the beginning either. It took time to build it up. And the Playstore has never been a part of AOSP, that has always been part of Google's services, so why should they be forced to offer it to anyone who wants to use it? Google Maps has also never been part of AOSP, should they also have to surrender that as well to anyone who wants to use it? These companies have the same ability to do what Google did with Android, to build out their own OS and appstore. It will take time and money, but it can be done. But most of these companies don't want to take the time and effort to build something, they want to have access to it now and for little to no cost. Google had to compete with Apple, Blackberry, and Symbian, an OS that no one thought could be surpassed due to it's high global market share. But because of the success of their search engine, they had the capital to build it out. Some may not have that capital to go to, but that is the same in any industry. There are plenty of companies that don't make it due to money issues. Now do I think that Google is monopolistic in some cases? Yes, I just don't think Android is one of them.

6. Neros

Posts: 1016; Member since: Dec 19, 2014

Yep, that's google in a nutshell.

Latest Stories

This copy is for your personal, non-commercial use only. You can order presentation-ready copies for distribution to your colleagues, clients or customers at https://www.parsintl.com/phonearena or use the Reprints & Permissions tool that appears at the bottom of each web page. Visit https://www.parsintl.com/ for samples and additional information.