Saturday, July 21, 2018

Google Is Fined $5 Billion by EU in Android Antitrust Case

Decision marks the European Union’s biggest-ever antitrust fine and sharpest rebuke to Silicon Valley

By Sam Schechner And Douglas MacMillan. Excerpts:
"the bloc’s antitrust regulator found Wednesday that Google had abused the dominance of its Android operating system, which runs more than 80% of the world’s smartphones, to promote and entrench the company’s cash-cow search engine."

"For cash-rich Alphabet, however, the financial penalty is potentially less onerous than the business changes Brussels has demanded, which could give players including smartphone makers and mobile carriers more leverage to extract payments from Google and its rivals.

The EU ordered Google to stop making phone manufacturers pre-install its search app and the Chrome web browser if they want to pre-install Google’s Play store, which is the dominant way to download Android apps. The bloc also ordered Google to end restrictions that discourage manufacturers from selling devices that run unofficial versions of Android."

"Google said Android, which is free for manufacturers to use, has increased competition among smartphone makers, lowering prices for consumers."

"Google also said the allegation that it stymied competing apps is false because manufacturers typically install many rival apps on Android devices—and consumers can download others."

"The two apps targeted in the EU decision, Google’s search and its Chrome browser, are extremely popular in their own right. Consumers are likely to seek them out from an app store even if they weren’t preinstalled on the phone."

"while the EU ruling may have opened the door for device makers that want to charge Google to pre-install its search and browser apps, Google has its own leverage over manufacturers. The internet giant could counter by demanding payment for Android."

"there aren’t many competing options."

"In exchange for providing Android to smartphone makers free of charge, Google encourages them to offer devices loaded with Google services such as search, YouTube, Gmail and Google Maps. That allows Google to gather vast amounts of data on consumers based on their use of those popular apps and then devise and target ads.

Now, Google may be forced to offer new terms that give handset makers and phone carriers more freedom to feature their own apps, strike deals with Google’s rivals or even charge Google for pre-installing its apps."

[The EU is] "requiring Google to permit phone makers to offer their own tailored operating systems based on Android’s open-source version. That requirement could make it harder for Google to offer a single, standardized version of its mobile software on which all Android apps can be used."

"The EU ruling could ultimately benefit smartphone users by helping mobile app makers compete with Google services by offering better features and lower prices"

"Supporters of Google, however, contend that the company may have less incentive to develop innovative Android products if it ends up making less money from mobile phones."

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