Google has tangled with European regulators on numerous occasions, but today marks the beginning of what will probably be the biggest battle between Google and the European Commission yet. The Commission has officially issues a “Statement of Objections” that accuses Google of breaching EU antitrust regulations in the way it manages Android. This could eventually lead to billions in fines for Google and requirements that change the way it operates in Europe.
There is no doubt that Google has a dominant market position in Europe — that’s not why the charges have been filed. The European Commission alleges that Google has used its more than 90% share in search and mobile OS to unfairly limit competition. The Commission calls out several Google practices as anti-competitive, but from a consumer perspective, you might think of many of these as practices as positives. Google issued a prepared statement moments after the EU announcement, but let’s try to dig a little deeper into this issue.
Some of the Commission’s objections mirror the Microsoft case more than a decade ago. Google requires Android OEMs that license its services to pre-install Google Search and Chrome. While users are free to change the defaults or install alternative services, the Commission says most users don’t do that and Google knows it. In the Commission’s view, this reinforces Google’s dominant position in internet services. Google notes that there are many third-party apps preinstalled on Android devices from companies like Facebook, Amazon, and Microsoft. Funny enough, bloatware is something users complain about frequently. The Commission also alleges Google offers financial incentives for pre-installing certain apps, but didn’t go into detail.
The other side of the European Commission’s case against Google is more significant as it questions the legality of Google’s basic licensing of Android; the so-called “anti-fragmentation agreement.” As Android has grown, this agreement has been Google’s main tool in preventing incompatible devices from flooding the market.
Android is open source, meaning anyone can download the core code from the Android Open Source Project (AOSP). This is a fully functional OS, just without the proprietary Google bits. Several companies like Amazon use this code to make custom versions of Android, but Google’s anti-fragmentation agreement restricts what its partner manufacturers can do, and this is what upsets the European Commission. Basically, manufacturers that opt to license Android and get the Google apps cannot then also build their own version of Android for devices — known as an Android fork.
According to Google’s position, allowing forks could cause people to buy incompatible Android devices without realizing it. If you had a Samsung Android phone before and you buy another one, you’d expect it to work with all your apps and services. If Samsung were allowed to sell both standard Android and Android fork devices, you could end up with a phone that doesn’t work the way you thought it would. Google certification ensures that Android devices sold to consumers work correctly.
Google freely admits there’s a financial incentive here too. It gives Android away, so it makes its money on the back end with services and ads. The restrictions help it do that, but it argues they are also beneficial for the consumer in various ways. The European Commission hasn’t bought this argument thus far, but now it’s up to the lawyers to hash it out.