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Europe Vs Google: EU Commission Opens Formal Investigation Against Google

Updated 18 Sep, 2016

Believed to be breaking its antitrust rules in relation to Android mobile operating system, the European Commission has launched a formal investigation against Google and its parent company, Alphabet.

It may seem odd at first, after all, Android is an open sourced operating system.

Yet EU Commission has reached the conclusion, after a preliminary research, that Google may in fact and in effect is breaking the EU competition policy.

“The European Commission has informed Google of its preliminary view that the company has, in breach of EU antitrust rules, abused its dominant position by imposing restrictions on Android device manufacturers and mobile network operators.”

The bone of contention, according to the Commission, is that Google has allegedly breached EU antitrust rules by several ways, and these are:

  • Requiring manufacturers to pre-install Google Search and Google’s Chrome browser and requiring them to set Google Search as default search service on their devices.
  • Preventing manufacturers from selling smart mobile devices running on competing operating systems based on the Android open source code.
  • Giving financial incentives to manufacturers and mobile network operators on condition that they exclusively pre-install Google Search on their devices.

The main concern of the EU, it seems, is that by doing so Google is effectively blocking any chances for competition from other parties that might be substantial to technological advancement, not to mention, public finance.

Google’s Response

Google’s reaction was swift, defending their approach and justifying it.

“The European Commission has been investigating our approach, and today issued a Statement of Objections, raising questions about its impact on competition. We take these concerns seriously, but we also believe that our business model keeps manufacturers’ costs low and their flexibility high, while giving consumers unprecedented control of their mobile devices.”

The main points Google mentions in their defense are:

  1. The agreements Google has with their partners are entirely voluntary.
  2. Manufacturers who utilize Android must commit to test and certify their devices will support Android apps – otherwise apps wouldn’t work from one Android device to the next.
  3. Manufacturers are free to add other apps in addition to Google suite, such as, apps from Microsoft, Facebook, Amazon, and so on.
  4. Although Android is free to use, it is, in contrast, costly to develop. Therefore Google offsets their costs through the revenue generated via Google apps and services.
  5. Android is simple and easy for users to personalize.

 

This is not the first time EU Commission has conducted such kind of investigation against a large company. Microsoft corp vs Commission is one of the most notorious past cases.

Reading through Google’s points it’s apparent that there’s a certain degree of validity in their approach, yet it doesn’t seem to directly answer EU concern regarding competition blocking.

Hence, it may be predicted that a follow-up would be imminent.

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