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April 18, 2016
European Competition Commissioner Margarethe Vestager reminded Google that the investigation she launched into the way it behaves towards Android partners a year ago is still ongoing.
In a recent speech entitled ‘Competition: the mother of invention’, Vestager heavily emphasised the importance of innovation and inferred that successful companies try to hold back innovative companies that may encroach on their interests. She cited the EC case against Microsoft from a decade or so ago as an example of how unamused the EC is by dominant platform companies using their position to freeze others out of the market.
“That’s why we’re looking closely at Google’s contracts with phone makers and operators which use the Android operating system,” said Vestager. “When we take a new smartphone out of its box, we want it to be ready to go straight away. We expect the maker – or the network operator – to make sure the basic apps, like a search app, are pre-loaded before it gets to us. And that gives innovators a great opportunity to bring a new app to people’s attention.
“Our concern is that, by requiring phone makers and operators to pre-load a set of Google apps, rather than letting them decide for themselves which apps to load, Google might have cut off one of the main ways that new apps can reach customers.”
This is quite analogous to the Windows case in that a dominant OS provider can be deemed to be anticompetitive if they bundle non-core software with the OS. In Microsoft’s case it was things like WMP and Internet Explorer but in Google’s case there’s the browser, search, email, maps, app store, cloud storage and many more, so the potential implications are very serious.
Google will continue to point out that vendors, such as Amazon, are free to use the core Android code without all the Google stuff. This is true but vendors have to follow much stricter rules if they want to provide access to the Play store, without which the experience is greatly diminished, so that argument may fail to convince the EC. The company is also still being investigated for the way is presents some search results.
Google hasn’t formally responded to Vestager’s speech but the FT reported Google’s European boss Matt Brittin as indicating European officials were ill-informed. “There are some places in Europe and some interests in Europe where the first inclination is to protect the past from the future,” he said. “There is an educational job to do there. We and others have a lot to do.”
This case is more complicated than the Microsoft one. Most Android users are presumably happy to use Google search, Gmail, Google Maps, etc. You can, of course, explore alternatives, but only if you have access to the Play store, so which services are the EC going to conclude are anti-competitive by their pre-installation? Apple has a similar level of bundling of its own stuff and in some European markets, such as the UK, is not far short of Android in market share, so will it be investigated too? As ever with the EC this looks set to drag on for some time.
As the Editorial Director of Telecoms.com, Scott oversees all editorial activity on the site and also manages the Telecoms.com Intelligence arm, which focuses on analysis and bespoke content.
Scott has been covering the mobile phone and broader technology industries for over ten years. Prior to Telecoms.com Scott was the primary smartphone specialist at industry analyst Strategy Analytics’. Before that Scott was a technology journalist, covering the PC and telecoms sectors from a business perspective.
Follow him @scottbicheno
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