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Home / Technology / Google gets fined $ 5 billion for Android antitrust abuse – TechCrunch

Google gets fined $ 5 billion for Android antitrust abuse – TechCrunch



imposed a fine of € 4.34 billion on European antitrust authorities for abusing the dominance of their Android mobile operating system.

Competition Commissioner Margrethe Vestager has tweeted to confirm this the punishment leading up to a press conference. Stay tuned for more details as we receive them.

In a lengthy statement about the decision, Vestager said:

Today, the mobile Internet makes more than half of the world's internet traffic. It has changed the lives of millions of Europeans. In our case, there are three types of restrictions imposed on Google Android device manufacturers and network operators to ensure that traffic on Android devices goes to the Google search engine. In this way, Google has used Android as a vehicle to cement the dominance of its search engine. These practices have deprived rivals of the opportunity to innovate and assert themselves in performance. They have deprived European consumers of the benefits of effective competition in the important mobile sector. This is illegal under EU antitrust law.

Specifically, the EU has ruled that Google:

  • has required manufacturers to pre-install the Google Search app and browser app (Chrome) as a prerequisite for licensing the Google App Store (the Play Store);
  • payments to certain large manufacturers and mobile network operators on the condition that they pre-installed the Google Search app exclusively on their devices; and
  • prevented vendors who want to pre-install Google apps from selling even a single smart mobile device with alternative versions of Android that were not approved by Google (so-called "Android forks").

The decision also concludes that Google is dominant in the general Internet search services markets; licensable intelligent mobile operating systems; and App Stores for the Android Operating System

During the press conference, Vestager said that the Commission has found that Google has violated its competition rules with Android since 2011 in 2013 after Google was called by the Commission Google is gradually making illegal payments to device manufacturers to pre-install Google Search only. "The illegal practice was practically discontinued in 2014."

"The ruling ends today that the restrictions Google imposed on manufacturers and network operators using Android have violated rules since [EU]," Vestager said. "First, because Google's practices have stopped competing search engines from getting their money's worth, they've made sure that the Google search engine is preinstalled on virtually all Android devices, which is an unattainable advantage

"And by making payments to major manufacturers and network operators on the condition that no other search app or search engine was preinstalled – well, then, competitors were excluded from this possibility. "

" Google's practices are also hurting competition and other innovations in the broader mobile space, not just the Internet search, but because they've kept other mobile browsers from effectively competing with the preinstalled Google Chrome browser.

"Eventually, they've hampered the development of Android forks, which could have provided a platform for rival search engines and other app developers."

She highlighted the example of Amazon's Android fork, Fire OS, as competing Android Platform that has suffered from Google's contractual agreements with device manufacturers

"In 2012 and 2013, Amazon attempted to license its Android fork, Fire OS, to device manufacturers to work with manufacturers to increase their commercial success The manufacturers were interested, but due to Google's limitations, manufacturers could not even launch Fire OS on a single device, "she said.

"You have lost the right to sell an Android phone with the main Google apps, but today there are very few devices running Fire OS, namely only those made by Amazon, and that's not a relative result are entitled to set technical requirements to ensure that functionality and apps work smoothly within their own Android ecosystem, but these technical requirements can not be used as an excuse to prevent the development of competing Android ecosystems.

"Google can Do not eat cakes or eat cakes. "

Vestager has also characterized Google's actions as monopolistic to data By blocking competing apps and services, they also deprived rivals of access to valuable data through increased user traffic, which in turn would have allowed competitors to improve their products.

What about Google She was asked on several occasions whether the separation from Google was not more effective than the cease – and – break decision taken today by the Commission, in Englisch: www.mjfriendship.de/en/index.php?op…01&Itemid=37 […] Responsible for Google 's Responsible Action Against Illegal Conduct on Android (19659002) She replied that she was not sure if Google' s resolution would lead to effective competition Englisch: www.mjfriendship.de/en/index.php?op…=view&id=167 ? op … 27 & Itemid = 47

"Here we have made a very clear decision that will allow mobile device manufacturers to have a choice – that we will have as a consumer choice as well. That's what the competition is all about. And I think that's more important than discussing whether or not a company could be liquidated, "she said when asked if she would rule out the possibility of Google's breakdown – so she ignored a direct response.

"I think what's important for the competition is that more players can really get started to reach consumers, so that we can choose what we like best," she added. "Try new ones Search engines, new browsers, you might have a phone that works a bit differently [via an Android fork] … perhaps the entirety of the phone as presented could allow others to compete to show consumers what they're doing we can do what we invented, we put our efforts to the test, that's the innovation we want to present to you. In my opinion, this would allow competition.

She also stressed the importance of adopting EU legislation on transparency and fairness for businesses that rely on online platforms.

"I think there is a very important discussion to be discussed You can see how the laws passed by my colleagues can be passed – legislation that ensures that you have transparency and fairness in the relationship between the company and the platform, "she said

" So if you're a company and that you find, "Oh, my traffic has stopped", that you know why it happened, when it happened and what you need to do to get your traffic back …. because that will change the market and our way of life Protecting consumers, but also as a company. "

Google has tweeted a first reaction to the decision, claiming that Android has created" a dynamic ecosystem, rapid innovation, and less. "

A company spokesman confirmed that it will appeal the Commission decision ,

In a lengthy blog post, CEO Sundar Pichai explains the company's argument that the Android ecosystem has "created more choices, not less." For example:

Today, Android has more than 24,000 devices at any price of more than 1,300 different brands, including Dutch, Finnish, French, German, Hungarian, Italian, Latvian and Polish, Romanian, Spanish and Swedish
Telephone manufacturers

The phones manufactured by these companies are all different, but they have one thing in common – the ability to run the same applications. This is possible thanks to simple rules that ensure technical compatibility, regardless of the size or shape of the device. No operator is required to comply with these rules – they can use or modify Android as they like with Amazon's Fire tablets and TV sticks.

He also has a veiled warning of the consequences If Google's "Free Distribution" model for Android from the rest, he writes:

The free distribution of the Android platform and the Google applications is not only for Phone manufacturers and operators efficient, but also for developers and consumers of great advantage. If phone manufacturers and mobile operators could not include our apps in their large selection of devices, it would disrupt the balance of the Android ecosystem. So far, the Android business model has meant that we did not have to pay phone manufacturers for our technology or rely on a tightly controlled distribution model.

The punishment is the second major punishment for the sign maker to violate the EU competition rules in just over a year – and the highest bid ever made by the Commission for abusing a dominant market position.

In June 2017, Google was hit by a € 2.4 billion antitrust fine (~ $ 2.7 billion), another of its products, Search Comparison Service, Google Shopping. The company has since made changes to the display of search results for products in Europe.

The block rules allow companies to be punished with 10% of their worldwide revenue if they violate European competition law. [196592002] Google's parent company Alphabet reported in 2017 an annual turnover of 110.9 billion US dollars. The $ 5 billion fine is about half the amount the company would have been able to fight if the EU regulator had imposed the maximum penalty.

Very serious unlawful conduct "

The Commission stated that the amount of the fine" took into account the duration and seriousness of the infringement. "

It was also stated that it had been calculated on the basis of the Google search yield. Advertising services on Android devices in the European Economic Area (according to its own fines guidelines)

At the press conference, as the Commission has set the level of punishment twice as high as in the Google Shopping case, Vestager highlighted the period over which he has gone was, the fact that he had three components, and the effects, combined with Google's increasing sales – and finally added: It is a very serious violation. It is a very serious illegal behavior. "

Google will have three months time but will probably appeal – and litigation could end the process h prevent many years. (However, if the fine is not paid within this time limit, penalty payments of up to 5% of the Company's average daily worldwide turnover may be enforced.)

Before the Commission's record fine for Google products: the next The highest antitrust fine is a € 1.06 billion antitrust fine for chip maker Intel in 2009.

However, just last year, Europe's supreme court ruled that the case against Intel – which focuses on discounts for To offer bulk buyers – should be returned to a court of law almost a decade after the original antitrust decision to be considered again. The Google lawyers should thus go one step further in this next European antitrust fight.

The recent EU fine for Android has been put forward for more than two years on the basis of preliminary findings and consistently prescriptive comments from the Commission Vestager during a multiannual investigation

And in light of several EU antitrust investigations into Google companies and Business Practices (the EU has also investigated Google's AdSense advertising service – a separate investigation by Vestager (19659002) The Commission's previous finding that Google is a dominant player in Internet search – a verdict that was made in Google's investigation last year Shopping – is also important and makes the final verdict in the Android case more likely, because the status Google imposes the duty not to abuse its dominant position in other neighboring markets

Last summer, Vestager announced the Google Shopping criminal case and underlined that dominant companies have to be "more vigilant" and that they have a "special responsibility" to ensure that they do not violate antitrust rules; this also applies "in the market where it is dominant" and "on any other Market". That means – as here in the Android case – also in mobile services.

While a one-time fine – even one that amounts to billions of dollars – can not do lasting harm to a wealthy company like Alphabet, a major threat to his business is the changes regulators need to run Android, which could have a lasting impact on Google as they redesign the competitive landscape for mobile services.

That's at least the Commission's intention: what to reset? has been rated as an unfair competitive advantage for Google over Android and promotes competitive innovation as competing products have a fairer chance to impress consumers.

Although it does not prescribe specific remedies.

For example, Vestager was asked during the press conference, whether the Commission would like Google to send push notifications to existing Android users to highlight alternatives and thus provide relief to consumers who ha ha The electoral restrictions that they have Device manufacturers and network operators were already having an impact on them.

"Google needs to figure out how to lift that responsibility," she said. "That's what they have to do … Google can make that kind of choice [i.e. sending push notifications] – we have no position on that."

However, the popularity and profile of Google services suggests that even if Android users are offered the choice. As a result of an EU anti-virus agent – from search engines, map services, mobile browsers or even app stores most likely choose Google's offer that is most familiar to them.

Antitrust law could have the opportunity to change consumer habits over time – for example, when OEMs offer Android devices preinstalled with alternative mobile services, increasing the visibility of non-Google apps and services , That is clearly the hope of the Commission.

Interestingly, in recent months, Google has signed contracts with Chinese OEMs – to bring its ARCore technology into markets where the core services are censored and the Play Store is limited. And his strategy of circumventing regional restrictions in China through closer cooperation with device manufacturers could also be part of a plan to secure new regulatory restrictions imposed on Android elsewhere.

Although complainants in the previous antitrust case against Google Shopping continue to express displeasure over the outcome on this front. Commenting on the news that another Android antitrust fine was coming in, Shivaun Raff, CEO of Foundem, the main complainant on Google Shopping, said, "Fines make headlines, effective remedies make a difference."

So, hell in detail be the Android funds that Google is launching.

"The ruling requires that Google bring its illegal behavior to an effective end within 90 days," Vestager said today. "Our decision requires at least that Google stop and not participate in the three described restrictions, in other words, our decision prevents Google from controlling which manufacturers of search and browser apps can pre-install on Android devices or which But it is Google's sole responsibility to ensure that it alters its behavior so that the violations effectively complete. "

" We will monitor this very closely, "she added and warned that non-compliance would continue penalties – up to 5% of Alphabet's average daily turnover for each day of non-compliance due to the onset of non-compliance. "Our decision requires Google to change the way it operates and faces the consequences of its action."

Aptoide, one of the original Appstore complainants, filed an antitrust complaint with the European Commission in 2014, complaining that Google's policy did not allow alternative app stores that competed with the Play Store to valid content – has welcomed today's decision.

CEO Paulo Trezentos told us: "The EU decision, which justifies our antitrust arguments, is a positive first step towards a more open market, more competitive and better tailored to the users." These are the kinds of decisions industry makes And we hope that will help everyone. "

Google also has more warnings on Google Shopping's compliance page:" We have not yet commented on whether Google does And as this has not happened yet, this remains an open question. "

She also said that the Commission continues to explore other elements of Google's business practices in relation to other vertical search services.

"I can the result of these ongoing investigations," she said, citing the ongoing AdSense investigation, adding that they continue to be "our highest priority".

Android as Antitrust Trojan

The European Commission Announces The official Android review in April 2015 found that Google "requested complaints and incentives for OEMs to exclusively provide their own services on devices on Android devices to install". In addition, Google investigated whether Google compromised the capabilities of smartphones and tablet manufacturers who use and develop other OS versions of Android (eg by branching off the open source platform).

Rivals – Ties Together Under the Banner "FairSearch" – Complained that Google essentially used the platform as a "Trojan horse" to unfairly dominate the mobile web. The listing of the lobby group in the EU Transparency Register describes its intention to promote "innovation and choice in the Internet ecosystem by promoting and defending competition in online and mobile searches within the European Union". Buscape, Cepic, Foundem, Naspers, Nokia, Oracle, TripAdvisor and Yroo.

On average, Android in Europe has 70-75% market share for smartphones. However, in some European countries, the operating system accounts for an even higher proportion of usage. In Spain, for example, according to market data from Kantar Worldpanel, Android reached a market share of 86.1% as of March.

Android has gained even more market share in some European countries in recent years, while Google also uses the Internet search product, accounting for around 90% of the European market, and has been raising competition concerns over its mobile operating system for years.

Last year, Google reached an agreement with the Russian antitrust authorities over Android, which the company should no longer demand exclusivity of its applications on Android devices in Russia; could not restrict the pre-installation of competing search engines and apps, even on the home screen; could no longer require Google Search to be the only general search engine preinstalled.

Google also agreed with the Russian antitrust authorities that it would no longer enforce its previous agreements if the mobile phone manufacturers had accepted one of these terms. In addition, under the agreement, Google had to allow third parties to include their own search engines in a selection window and allow users to select their preferred default search engine from a selection window that appears in Google's Chrome browser. The company also needed to develop a new Chrome widget for Android devices that is already in use in Russia to replace the default Google search widget on the home screen so they would get a selection on launch.

A year after Vestager's audience announcement of the EU's antitrust study of Android, she issued a formal statement of objections, saying the commission believed that Google "implemented a strategy for mobile devices to maintain its dominance over the general To preserve and strengthen Internet search "; problematic for Android users whose devices are already preinstalled in the Google Play Store, the use of other app stores (which can not be downloaded from Google Play).

She also expressed concerns about providing financial incentives to manufacturers and mobile carriers, assuming that Google Search is preinstalled as an exclusive search provider. "In our opinion, as we see it now, it prevents competition due to the strength of the financial stimulus," said Vestager in April 2016.

Google received several months to officially respond to the antitrust lawsuit Android – which it eventually did in November 2016, following a prolongation of the Commission's original deadline.

In its refutation, Google then argued that unlike antitrust complaints, Android has created a thriving and competitive ecosystem for mobile apps. The EU also claimed that it ignores the relevant competition in the form of Apple's competing iOS platform – although iOS is neither dominant nor dominant in Europe.

Google also argued its "Voluntary Compatibility Agreements" for Android OEMs are a necessary mechanism to avoid platform fragmentation that would make life more difficult for app developers, and say that its requirement for Android OEMs is the To use Google Search by default, payment for the provision of the suite is free for device manufacturers (provided there is no formal license fee for Android).

It has also said "free sales is an efficient solution for everyone" – argues that it lowers prices for phone manufacturers and consumers, while "continue our significant investments in Android and Play "

In addition, Google attempted to characterize open source platforms as" fragile ", arguing that the Commission's approach endangers the" balance of needs "between users and developers and signals their actions could be "closed" Open Platforms. "

At today's press conference, Vestager was asked if she feared that the cost of mobile phones could rise if Google responded to antitrust by charging a royalty for OEMs Use of Android charges for free

It pointed to the revenue that Google generates through the Play Store. " are quite high, so I think that Google still has the opportunity to recover the investment in the development of the Android operating system, "she suggested.

"I think a number of different decisions can be made Google and Google must make that choice," she added. "What we are seeing in general is that competition can lower prices and make you better choices, so that you have a theory that prices will go up, prices are likely to fall due to more competition is now open – there may be competition over how that works, and that's the key point of the decision. "


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