EU takes aim at Google’s claims that mobile software is open to all
Google has long stressed that Android, its popular mobile software, is open for anyone to use, including its rivals.
But the company’s claims are now under threat after Europe’s antitrust authorities Wednesday charged the company with unfairly using Android to promote its own services — like mobile search — over those of its rivals. In doing so, regulators brought particular scrutiny to Google’s relationships with some of the world’s biggest cellphone makers, which have helped expand the reach of Android.
Margrethe Vestager, the European Union’s antitrust chief, said Google had required some of the cellphone manufacturers to pre-install the company’s services, including its Google Play smartphone application store, and had given them unfair financial incentives to favor Google’s services on their mobile devices. Those practices undermined competition and consumer choice, she said.
“Google has abused its dominant position,” Vestager said Wednesday. The company’s “behavior has harmed consumers by restricting innovation in the wider mobile space.”
The company denies it has broken European competition rules, and the charges may not lead to financial or other penalties against Google, which now has three months to respond to the accusations.
“We take these concerns seriously,” Kent Walker, Google’s general counsel, said in a blog post. “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.”
By taking aim at Android — the mobile software that holds more than 80 percent of the worldwide market share for smartphone operating systems — Europe has opened the latest chapter in its continuing battle with U.S. technology companies.
These players, including Amazon and Facebook, dominate how Europe’s 500 million people use digital services, including social media, online movies and e-commerce. Google is facing separate charges, filed last year, in Europe over whether it unfairly favored some of its search services over those of rivals.
Europe’s antitrust claims highlight Google’s increasingly thorny relationships with smartphone manufacturers such as HTC and Samsung, among others. Vestager said Android’s prominent role in the mobile market was not in question but that she was concerned the contracts the company signed with smartphone manufacturers had made it difficult, if not impossible, for rival search engines and smartphone app stores to compete in the European Union.
The device makers, already struggling against cutthroat competition, have become reliant on Google’s digital services available on Android, even as they have tried to persuade consumers to try their own mobile services or those of Google’s competitors. Some, including Samsung, have backed rival operating systems to loosen Android’s grip, but such efforts have so far proved unsuccessful.
And while global cellphone manufacturers once profited from using Android to expand rapidly, particularly in emerging markets, their growth has since slowed.
Analysts say these cellphone makers’ inability to wean consumers off Google’s popular mobile mapping, email and other services has potentially shut them out of billions of dollars in extra revenue as people’s digital habits — including online search and e-commerce purchases — shift to mobile devices.
If Google is found to have broken European rules, the company may face fines of as much as 10 percent of its annual revenue, or roughly $7 billion.