Google has been slapped with a five billion fine by the European Commission for what they have termed as anti-competitive behaviour. The EU Commission is also angling for Google to change some of the agreements phone makers have to sign if they want to sell phones with Android in the EU. The fine has been described as the largest antitrust penalty eve
What have Google done?
Google is accused of having abused the dominance of their search engine? They are said to have done this in order to promote their own applications and services.
In Europe, Android is the most popular operating system for smartphones and EU’s says Google has used that to force the hand of both phone manufacturers and telecoms companies to preinstall Google’s search engine and the Chrome browser –which defaults to Google’s search engine- on their devices.
How do Google do this? Well if you are an Android phone maker and you’re selling phones in Europe you are required to make Google the default engine and to preinstall Chrome if you want access to the Google Play Store. This is why on Samsung phones usually have duplicate applications. Samsung wants to push their own applications but they are required to include Google’s applications as well, thus the user has a Samsung Store and The Play Store –two apps that serve the same purpose.
In some cases Google actually pays for pre-installation of Search and Chrome. Very few manufacturers are willing to ship their phones without the Playstore so this is a deal they have to take and the European Commission isn’t too happy about that. They feel this is foreclosed competition from other applications and search engines that could have challenged Google. Essentially these agreements have ensured Google’s dominance.
On top of the fine, the EU has also called on Google to end it’s anti-competititve behaviour in 90 days. The behaviour being described as anti-competitive essentially boils down to three agreements that Google have in place with phone makers and telecoms companies:
- To install the playstore you must install Google Chrome and Google Search
- Revenue sharing agreements if Google is exclusively your search engine (i.e Google paying you to install their apps exclusively) should cease to exist
- Google also has to stop implementing the Anti-fragmentation agreement. With this, Google basically bars a company from making it’s own version of Android. Even though android is open source, if a manufacture wants to get access to the Google applications such as the Play Store, Google has to give manufacturers the go-ahead to dish out an Android version they are happy with.
Google is pushing back
It’s being reported that Google will appeal this decision they feel that Android creates more choice not less. They feel that before Android, Apple was running away with the smartphone market. Google believe they have helped push down smartphone prices by creating competition from hundreds of manufacturers.
Google believe the decision taken by the EU could interfere with the way they fund Android and could lead to them potentially adding new licence fees-which would increase the cost of smartphones and reduce competition. Or Google could go the Apple route and make Android only accessible on their Pixel phones- which would also increase the cost of smartphones and reduce competition
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