Reflections on Google
after Android
The
European Commission has now issued its decision in the latest abuse of
dominance investigation into Google’s business practices. The Commission has imposed a record EUR 4.3
billion fine on Google attracting headlines worldwide. Two days on from the decision, a few early
themes are developing.
The
theories of harm that the Commission has settled on are much closer to
established case law. The Commission
finds that Google has acted abusively by unlawfully (1) tying its Search and
Chrome browser applications by requiring smartphone manufacturers to
pre-install these on Android devices if they also want to offer Google’s Play
Store, (2) offering financial incentives to those manufacturers to exclusively
pre-install Google Search, and (3) hindering the development of rival Android
systems.
The
fine represents a much higher percentage of worldwide turnover than in other
cases and is larger than the EUR 2.4 billion penalty imposed just a year ago in
the Commission’s Google Shopping investigation.
This is not surprising given the size of the relevant markets and the
scope of the Commission’s findings in Android.
Google
has understandably refuted the Commission’s case. It says that the Commission failed to take
sufficient account of competition from Apple’s iOS. While there may be competition between
Android and Apple at the retail level, this appears to miss the point. The issue at stake in this case is whether
Google had sufficient market power over smartphone manufacturers at the stage
of pre-installation of apps and where important technology choices are
set. Apple does not license its iOS to
manufacturers.
Questions
remain as to the effectiveness of remedial measures and what form they will
take. To ask Google to stop the
practices that the Commission has found to be infringing may not go far enough
for some complainants. It is not clear
whether other apps might be in scope.
Although
the Commission’s decision has settled the latest stage in this three-year long
probe, there remain questions as to whether the outcome will deliver what
rivals have been seeking in terms of levelling the competitive playing field. The Commission launched its investigation in
2015, but significant complaints were made before then.
The
challenge for regulatory intervention in a technology environment is getting
the right balance. Consumers have grown
accustomed to using Google services as default options. The Commission faces no easy task in trying
to overcome consumer acceptance of those products and services over the
years. Whether this is as a result of
superior products and services - or as a result of the practices that the
Commission has found to be problematic - depends on whether you are
‘pro-Google’ or not. And views can be
quite diametrically opposed.
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