 "EU charges Google with breaking antitrust rules")
European officials charged Google on Wednesday with breaking the region's competition rules by favouring some of its services on the popular Android mobile software over those of its rivals.
The charges are the latest chapter in Europe's continuing battle with technology companies that have come to dominate how the region's 500 million people use digital services including social media, like Facebook, and e-commerce, like Amazon. Google has already been the subject of a series of antitrust and privacy investigations across the 28-member bloc.
As part of the latest charges - officially known as a statement of objections - Margrethe Vestager, Europe's competition chief, said on Wednesday that Google had unfairly promoted its own services, like mobile search and its Chrome web browser, with cellphone manufacturers, limiting how rival companies could operate in the fast-growing smartphone software market.
"Google has abused its dominant position," Vestager said on Wednesday. "Google's behaviour has harmed consumers by restricting innovation in the wider mobile space."
In a statement, the European Commission, the bloc's executive arm, said that Google had used its Android software to protect its dominant position in online search, while providing unfair incentives to smartphone manufacturers and telecommunications carriers to favour the company's mobile services over those of rivals.
Europe's antitrust charges might not necessarily lead to financial or other penalties against Google, which now has several months to respond to the accusations. If it is found to have broken the region's rules, though, the company may face fines of up to 10 per cent of its global revenue, or roughly $7 billion, the maximum allowable amount.
Google denies that it has broken European competition rules, saying that its dealings with cellphone manufacturers like Samsung and HTC, among others, are voluntary, and that rival mobile services are readily available on its Android software.
"We take these concerns seriously," Kent Walker, Google's general counsel, said in a statement. "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."
Since acquiring the company that created Android in 2005, Google has used the operating system to become the dominant player in the mobile world.
While Apple generates the largest share of revenue from smartphone sales, Google, which does not make money from licensing its basic Android software to cellphone manufacturers, now holds more than 80 per cent of the smartphone operating system market worldwide, according to the technology research company Gartner.
The search giant is expected to earn more than $30 billion in revenue from its mobile activities this year, according to the research group eMarketer. That is because people, particularly in emerging markets, have become reliant on smartphones for surfing the web and are using personal computers less.
While the basic Android software is free, Google earns money through advertising from its mobile search products, as well as from licensing services like Google Maps to cellphone manufacturers. It also takes a cut of the revenue generated from each smartphone app bought on Google Play, its online store.
As part of the antitrust charges announced on Wednesday, Ms. Vestager said that Google's agreements with smartphone makers had made it difficult, if not impossible, for rival search engines and smartphone app stores to compete in the European Union.
"It may have become too difficult for other search engines or app stores to be available to consumers," she added.
This is not the first time that Google has faced competition woes. Last year, European antitrust authorities charged the company with unfairly favouring some of its search services over those of rivals, and a decision on those charges is expected in the coming months. United States officials also continue to investigate Google's use of Android software to promote some of its products, and regulators in countries as varied as Brazil, India and Russia are looking into the company's perceived dominance.
Yet it is in Europe that Google has come under the greatest scrutiny.
"The requirement for phone makers and operators to preload a set of Google apps is certainly problematic from the consumers' point of view," said Ramon Tremosa and Andreas Schwab, two members of the European Parliament who have been vocal in their criticism of Google's activities in Europe. "By acting this way, Google is, de facto, giving its own apps unfair advantage."
TRACKING TRUST OVER TIME
The charges are the latest chapter in Europe's continuing battle with technology companies that have come to dominate how the region's 500 million people use digital services including social media, like Facebook, and e-commerce, like Amazon. Google has already been the subject of a series of antitrust and privacy investigations across the 28-member bloc.
Read more from our special coverage on "GOOGLE"
As part of the latest charges - officially known as a statement of objections - Margrethe Vestager, Europe's competition chief, said on Wednesday that Google had unfairly promoted its own services, like mobile search and its Chrome web browser, with cellphone manufacturers, limiting how rival companies could operate in the fast-growing smartphone software market.
"Google has abused its dominant position," Vestager said on Wednesday. "Google's behaviour has harmed consumers by restricting innovation in the wider mobile space."
In a statement, the European Commission, the bloc's executive arm, said that Google had used its Android software to protect its dominant position in online search, while providing unfair incentives to smartphone manufacturers and telecommunications carriers to favour the company's mobile services over those of rivals.
Europe's antitrust charges might not necessarily lead to financial or other penalties against Google, which now has several months to respond to the accusations. If it is found to have broken the region's rules, though, the company may face fines of up to 10 per cent of its global revenue, or roughly $7 billion, the maximum allowable amount.
Google denies that it has broken European competition rules, saying that its dealings with cellphone manufacturers like Samsung and HTC, among others, are voluntary, and that rival mobile services are readily available on its Android software.
"We take these concerns seriously," Kent Walker, Google's general counsel, said in a statement. "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."
Since acquiring the company that created Android in 2005, Google has used the operating system to become the dominant player in the mobile world.
While Apple generates the largest share of revenue from smartphone sales, Google, which does not make money from licensing its basic Android software to cellphone manufacturers, now holds more than 80 per cent of the smartphone operating system market worldwide, according to the technology research company Gartner.
The search giant is expected to earn more than $30 billion in revenue from its mobile activities this year, according to the research group eMarketer. That is because people, particularly in emerging markets, have become reliant on smartphones for surfing the web and are using personal computers less.
While the basic Android software is free, Google earns money through advertising from its mobile search products, as well as from licensing services like Google Maps to cellphone manufacturers. It also takes a cut of the revenue generated from each smartphone app bought on Google Play, its online store.
As part of the antitrust charges announced on Wednesday, Ms. Vestager said that Google's agreements with smartphone makers had made it difficult, if not impossible, for rival search engines and smartphone app stores to compete in the European Union.
"It may have become too difficult for other search engines or app stores to be available to consumers," she added.
This is not the first time that Google has faced competition woes. Last year, European antitrust authorities charged the company with unfairly favouring some of its search services over those of rivals, and a decision on those charges is expected in the coming months. United States officials also continue to investigate Google's use of Android software to promote some of its products, and regulators in countries as varied as Brazil, India and Russia are looking into the company's perceived dominance.
Yet it is in Europe that Google has come under the greatest scrutiny.
"The requirement for phone makers and operators to preload a set of Google apps is certainly problematic from the consumers' point of view," said Ramon Tremosa and Andreas Schwab, two members of the European Parliament who have been vocal in their criticism of Google's activities in Europe. "By acting this way, Google is, de facto, giving its own apps unfair advantage."
TRACKING TRUST OVER TIME
- February 2010: Joaquin Almunia starts to examine Microsoft's antitrust complaint against Google
- November 30, 2010: The European Commission announces an antitrust probe "into allegations that Google has abused a dominant position in online search"
- March 21, 2013: Eleven companies, including TripAdvisor, Expedia and the German newspaper publishers' association, ask Almunia in an open letter to send Google formal objections
- April 9, 2013: A group representing Microsoft, Expedia and Nokia Oyj files antitrust complaint against Google over its Android operating system. The group says the EU should investigate Google's "deceptive conduct to lockout competition" in the mobile market
- April 15, 2015: EU sends Google a formal statement of objections, or SO, "for abusing its dominance in the search-engine market by systematically favoring its own comparison shopping product in its general search results pages"
- November 10, 2015: Google faces a fresh round of European Union questions about Android as regulators seek to know whether Google Maps for phones has supplanted portable or in-car navigation devices, such as those produced by TomTom NV and the HERE unit of Nokia
- November 13, 2015: Yandex, building on a recent antitrust victory over Google in Russia, says it extended the legal battle to the EU as it seeks to force its US firm to unbundle services such as search from mobile devices using Android in the region
©2016 The New York Times News Service
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