EU Files Formal Charges Against Google Over Android Conduct
EU says Google imposed restrictions on Android device makers, network operators.
The sculpture of a Google Inc.’s Android mobile operating system mascot sits inside the Googleplex headquarters in Mountain View, California. Google’s behavior stifles competition and closes off ways for rival search engines to access the mobile market, the EU says. Photo: Bloomberg News
Google pursued an overall strategy on mobile devices to protect and expand its dominance on Internet search,” said European Antitrust Commissioner Margrethe Vestager in a news conference on Wednesday. “Google’s behavior has harmed consumers by stifling competition and harming innovation in the wider Internet space.”
Google General Counsel Kent Walker responded that “Android has helped foster a remarkable—and, importantly, sustainable—ecosystem, based on open-source software and open innovation,” adding that the company will work with the EU “to demonstrate that Android Advertisement is good for competition and good for consumers.”
Ms. Vestager last April opened the formal probe into Google’s conduct with its Android operating system. The investigation stems from a complaint filed in April 2013 by FairSearch, a coalition of technology companies.
On Wednesday, the commission laid out in greater detail its concerns about Google’s behavior with Android.
The EU said Google breached EU antitrust rules by requiring smartphone makers to preload Google Search and the Google Chrome browser and set Google Search as the default search service on devices if phone makers want to include any popular Google services on their devices, such as Google Maps or the Play store for apps.
Google also violated the rules by preventing manufacturers from selling smart mobile devices that run on competing operating systems based on Android code, and by offering financial incentives to manufacturers and carriers to exclusively pre-install Google search on devices, the EU said. Ms. Vestager declined to detail those incentives.
As Internet users have migrated from desktops to mobile devices, Android has been central to Google’s strategy, creating an ecosystem that encourages handset makers and phone carriers to install Google apps, so that users continue to see the ads that Google sells. Wednesday’s charges potentially threaten that model, and Google’s position in the fast-growing mobile-advertising market
The charges also escalate the EU’s broader effort to rein in a cadre of large U.S.-based tech firms that regulators and politicians accuse of running roughshod over national and international rules in areas spanning competition, privacy and taxes. Several EU privacy regulators are pursuing Facebook Inc. for alleged violations of national privacy laws, while the EU’s antitrust officials are investigating the tax affairs of Amazon.com Inc. and Apple Inc.
At the same time, countries such as Spain, France and Germany have clashed with online-service firms such as Uber Technologies Inc. and Airbnb Inc. that have threatened regulated industries including taxis and hotels. Meanwhile, tax authorities in France and other countries are trying to claw back hundreds of millions of euros in alleged back taxes from companies including Google.
Critics have accused the EU of pursuing a protectionist agenda aimed at kneecapping U.S. companies. Those critics, including tech executives, point in part to the decision Tuesday by Canada’s competition authority to close its probe of Google’s practices, including with regard to Android. But Ms. Vestager dismissed those objections.
“It is not our job to defend companies. It is our job to protect competition,” she said. “If dominance is abused, then we have an issue.”
Ms. Vestager has been aggressive in pursuing potential antitrust violations. Last April, when Ms. Vestager first opened a formal probe into Android, she also filed separate formal charges against Google for allegedly abusing its position as the leading search engine by favoring its own comparison shopping service. Google rejects those charges.
The EU is also investigating other parts of Google’s business, including whether the company leverages its dominance in search in other areas including copying of web content, display of travel, mapping and local search results and whether Google obstructs website operators from placing ads on their websites that compete with Google’s advertising business.
Google could face fines up to 10% of the company’s annual global revenue for each of the formal charges issued. The company could also seek to negotiate a settlement in both the Android and shopping cases. Last year, Alphabet reported $74.54 billion in world-wide revenue for its Google segment.