Microsoft, Oracle, and others file EU complaint over Google’s Android business

April 9, 2013
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european union flags Credit: tiseb/Flickr

FairSearch Europe, a coalition of companies that includes Microsoft, Nokia, and Oracle, has filed a formal complaint with the EU over Google’s alleged anti-competitive practices in the mobile market.

Over the past couple of years, Google has been under scrutiny from regulators in the US and the European Union for its privacy practices and the alleged abuse of its dominant position in the search engine market. More specifically, Google was accused of giving its own products preferential treatment in search results, which according to critics, provides the Mountain View giant an unfair advantage over rivals.

One of the most outspoken critics of Google’s practices in the search business has been FairSearch, a group backed by Microsoft among others, that is ostensibly dedicated to promoting fair competition. Now the same organization, through its FairSearch Europe presence, has filed a formal complaint with the EU’s antitrust watchdog over Google’s Android.

Besides Microsoft, FairSearch Europe brings together companies like Oracle, Nokia, Expedia, TripAdvisor, along a few other smaller ones. The group says in the complaint that Google is using Android “as a deceptive way to build advantages for key Google apps in 70 percent of the smartphones shipped today.”

“Google is using its Android mobile operating system as a ‘Trojan Horse’ to deceive partners, monopolize the mobile marketplace, and control consumer data,” said Thomas Vinje, Brussels-based counsel to the FairSearch coalition. “We are asking the Commission to move quickly and decisively to protect competition and innovation in this critical market. Failure to act will only embolden Google to repeat its desktop abuses of dominance as consumers increasingly turn to a mobile platform dominated by Google’s Android operating system.”

Specifically, FairSearch takes issue with Google’s licensing model for its suite of apps, which the group calls “must-have”. These apps, which include Maps, Talk, YouTube, and others, are licensed by Google to OEM partners, such as Samsung or HTC. While the Android operating system is free, if an OEM wants to preload Google’s apps, it must license the entire package. FairSearch claims that manufacturers are forced by the licensing terms to give Google’s apps prominent default placement on their phones, a practice that the group considers anti-competitive.

Moreover, FairSearch bemoans the “predatory distribution” of Android, saying that, because Google essentially gives away Android, other software makers (read Microsoft) aren’t able to make money off their own operating systems.

Google’s predatory distribution of Android at below-cost makes it difficult for other providers of operating systems to recoup investments in competing with Google’s dominant mobile platform
FairSearch

Leaving the irony of the situation aside (Microsoft was severely fined by the EU over its own anti-competitive practices), it’s hard for me to understand what FairSearch Europe thinks it can accomplish with this complaint. Its arguments seem shoddy at best. I fail to see how making a piece of software open source (which Android mostly is) is bad for competition.

Moreover, nobody forces OEMs to install Google apps or to make them the default apps for certain services. Back in 2010, Verizon started offering some phones with the default search engine set to Microsoft’s Bing. The abundance of bloatware on many smartphones is a clear indication that Google isn’t restricting manufacturers or carriers from adding whatever applications they deem useful to their phones. In addition, most of Google’s apps are freely available from the Play Store.

With that said, we don’t know the precise licensing terms between Google and device manufacturers, and the EU has a history of punishing perceived abuses of dominant position. Microsoft was fined over $1.1 billion by the EU for bundling Media Player with Windows, and risks another hefty fine for failing to offer a browser option to customers, as it was supposed to.

Google is also being investigated in Europe over its privacy policies, as well as search business. A similar investigation was closed last year by the FTC in the United States with Google emerging mostly unscathed.

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