EU hits Google with second antitrust charge

http://www.reuters.com/article/us-eu-google-antitrust-idUSKCN0XH0VX

by alsutton010203 • 10 years ago

102 119 10 years ago

"The stakes are higher for Google in the Android case as it made about $11 billion last year from advertising sales on Android phones through its apps such as Maps, Search and Gmail, according to estimates by financial analyst Richard Windsor."

I think it's safe to say that this analyst has no idea.

eptcyka• 10 years ago

Please do not submit links to mobile versions of the article.

dang2• 10 years ago

I assume people are submitting from their phones, where it would be hard not to. We always change these to the canonical URL when we see them.

jbob2000• 10 years ago

Totally implausible scenario, but what would happen if Google were to say "to hell with this" and just completely pull out of the EU? Like full-stop, nothing Google touching the EU.

Would there be riots? Would governments try to force Google back? Like, are they so essential to digital life that a complete withdrawal would cause some amount of chaos?

And if that's the case, isn't an antitrust suit a bit disingenuous? Isn't that like saying "hey, you guys are dominating over here, we want you to stop, but we also are going to continue to reinforce your dominance by continuing to use all of your services"?

dubcanada• 10 years ago

They wouldn't, but it's an interesting thing to think about.

I mean Google is the #1 search engine basically in the world (excluding some Asian countries who have their own search engines) so if Google was to theoretically block all of Europe, it would be really hard to tell what would happen...

ifdefdebug• 10 years ago

Google would be shrinking considerably, which is something I think they don't want, so I think antitrust suits are not disingenuous because Google has as much of an interest in operating in the EU as their European users. It's a mutual thing.

LunaSea• 10 years ago

All the Google services would be replaced by (at first lower quality) European versions. This would create a huge investment and tech sector growth wave.

One of the best things to happen to the European tech scene since the beginning of the Internet.

You can see this happening in Russia, China and India although for different reasons.

Even if this case doesn't change anything I think we will see Google's involvement be reduces drastically in the next 5 years due to European Union laws and restrictions.

sievebrain• 10 years ago

All? At first, lower quality?

I think you massively underestimate how much investment is required to produce even a basic search engine, let alone one that eventually catches up to what Google has produced. And that's just search. Now throw in Gmail, Maps, Android, Chrome, etc ... these are international collaborations for a reason.

JoshTriplett• 10 years ago

That also raises additional questions: there's a process and a set of rules for enforcing such a ruling against a company that a government actually has jurisdiction over (and thus must follow all the operational rules of a "native" company), and a different process and different rules for deciding that an entirely foreign company (with no nexus in the jurisdiction to enforce against) has acted so egregiously that their product should be blocked from importing.

Antitrust concerns commonly get enforced against companies within the country raising those concerns, but I don't know of any example of antitrust concerns raised by a country against an entirely foreign company and used to block imports of the company's products.

scholia6• 10 years ago

I don't think the EU is too worried about that. It has already imposed very large fines on both Intel and Microsoft, for example.

Like them, Google has lots of staff and offices throughout the EU.... although (not uniquely) it uses various methods to avoid paying taxes ;-)

skoczymroczny• 10 years ago

People would switch to Windows Phones, which are fairly popular in Eastern Europe.

izacus2• 10 years ago

Remember that a huge amount of Google tax evasion is due to EU loophole :)

pjc503• 10 years ago

In the short term there would be a lot of VPN access as people tried to deal with the chaos of having to transition away from gmail. I'd be very surprised if they just turned it off one day without warning, but if they did that would burn a lot of customer goodwill and provoke a class action from all their datacenter customers.

In the medium term? Having a social network with no Europeans on it kills G+ fairly rapidly, or it becomes a minority thing like Orkut. Likewise AppEngine is hobbled if it won't talk to Europe. People will undoubtedly continue to use and buy their Android phones (many of which are not bought from google but third parties) unless Google actively bricks them.

Remote-bricking all European Android devices is the nuclear option. Google is sued for billions. Google executives can no longer set foot in the EU without being arrested. International trade war starts. Google is declared an "unlawful combatant" and their HQ is bombed by DGSE.

blablablame2• 10 years ago

Probably seeing the stock lose more than half of it's value by pulling from the biggest market it operates in would see Google reverting their stance quickly.

Also, most likely, you would see bing+other local search engines gain traction, same for mail, maps, etc. Lets not forget, that a lot (majority?) of google search users use whatever the search engine is by default on their browsers and aren't really concerned about using google per se. Except search, a lot of folks where I live don't use google products (and if I switched their search engine they probably wouldn't notice that much except for saying it looks different)

kuschku5• 10 years ago

Actually, a lot of people already use bing maps instead of Google maps because of poor quality of Google maps in several European markets.

In my city in northern Germany (300k population), Google hasn’t updated anything since 2004. Refuses to integrate transit, although transit data is available in the requested format.

While Bing and Here maps both have data from last month, with 3D imagery, and realtime transit data. Of course it’s easy to choose which maps app one will use.

And all the nice AI features Google has over Bing & Co – like Google Now’s "you have to go 5min earlier to work because of a traffic jam" obviously don’t work without realtime transit and up-to-date maps data.

timthorn• 10 years ago

You could look to China for an example of what might happen - not quite the same dynamic, but Google did pull out there some time ago.

http://www.radiofreemobile.com/google-flavour-of-china/

matt4077• 10 years ago

The one good thing is that people may finally stop suggesting it as an option in every discussion of antitrust actions.

fauigerzigerk• 10 years ago

isn't an antitrust suit a bit disingenuous? Isn't that like saying "hey, you guys are dominating over here, we want you to stop"

That's not what the EC is saying. They're saying "hey guys, you're welcome to dominate over here, but as that dominant player you cannot use such and such licensing practices that we consider anti-competitive"

tacone• 10 years ago

Existing competitors (Bing, Yandex and so on) jumping in.

Massive lawsuits as Google actually sells services that would stop working, or that other vendors depend on.

Retaliation from the EU on alledged past violations.

Loss of revenue around 30-40% (just a guess) from losing EU customers (500M people market of first world countries) == lawsuits from its own US shareholders.

A wave of investments into EU newly found search market from all over the world.

Unsustainable political pressure from the US establishment to go back to EU ("we need that data and you're handing it to China or even worst, national states of Europe)

Tremendous loss of soft power and influence of the US on the old continent.

Financial default of tens of thousands of EU businesses, subsequent EU bailout, subsequent new protectionist measures over Internet businesses-

No more stupid comments on Youtube.

Who's that guy with a beard asking for money? It's Larry Page.

Websites all over EU begin to have a links section again.

Android gets banned, Nokia resurrects, with a big advertising campaign praising the long battery life and low radiation.

People cannot reach facebook anymore. They cannot look it up on Google and don't know what a domain name is. So they get on the road to ask other people how to reach facebook again. Then they become friend with them. And mate. Twenty years later Europe has now 10 competing search engines, the population had tripled as the result of mating and the average age has halved. They have far more less money than before, and they blame the greeks for that.

gruntled• 10 years ago

If that's the case, if Google could cause massive disruption by pulling out of the EU, they have effectively monopoly power in that market. So if that's the case, the suit is anything but disingenuous.

sschueller• 10 years ago

What about Apple?

givinguflac• 10 years ago

What about them? I don't think you understand the factors that are required for antitrust consideration. Android is like 80% of the market in Europe- you really think Apple is at all in the same foothold there?

Sephiroth87• 10 years ago

The other difference is about enforcing manufacturers, which in Apple's case is Apple themselves...

izacus2• 10 years ago

Note that criteria for anti trust action differ between EU and US. In EU market share isn't the only defining factor.

bingobob• 10 years ago

they don't allow any other browser engines on iOS

unlinker2• 10 years ago

Apple's market share in Europe is so laughable they literally can do whatever they want, but not allowing other browser engines on iOS is certainly not grounds for an antitrust lawsuit.

zanny• 10 years ago

The best possible outcome I could see from something like this is the opening up of the Play Store ecosystem to third party Android forks.

The contention is over Google licensing Android branding and its proprietary apps running on top of the AOSP and requiring them all be shipped together. The problem isn't the OS itself, it is the Play Store hegemony and the fact you cannot reasonably ship an Android phone without it - nobody would buy it. But the store is a proprietary and effectively closed app ecosystem completely under Google's control, thus the issue of monopoly exploitation.

At least, I hope. If they are seriously considering the whole OS as a trust issue that is insane. Anyone can fork or reuse the component parts below the Google app layer with the Apache 2 license. There are even projects like http://www.shashlik.io/ to run Android apps natively on other systems. The only part of the Android ecosystem that in any way really violates user freedoms (besides the proprietary POS blobs every phone manufacturer shoves into a forked Linux kernel with oodles of GPL violations) is the Google apps themselves, but you can always pull a Cyanogenmod and ship a phone without those apps installed.

wnevets5• 10 years ago

. The problem isn't the OS itself, it is the Play Store hegemony and the fact you cannot reasonably ship an Android phone without it - nobody would buy it.

isn't this what amazon does?

pjc503• 10 years ago

And as a result they have terrible sales: https://www.theguardian.com/technology/2014/aug/26/amazon-fi...

kyrra2• 10 years ago

While the Fire Phone may not have done well, all the Amazon Fire products are Android based. This includes the Fire Phone, Fire Tablets, and Fire TV.

dgacmu• 10 years ago

Xiaomi is a better example. They're doing surprisingly well -- wikipedia says 70.8m units sold in China, and they run their own app store. https://en.wikipedia.org/wiki/Xiaomi

jboydyhacker• 10 years ago

Google /Android already has an issue with App Quality relative to ios Apps- that would make it tougher to produce a quality product.

kuschku5• 10 years ago

but you can always pull a Cyanogenmod and ship a phone without those apps installed.

That’s exactly what you can’t. Google only allows you to ship Google Apps on one of your devices if you ship it on all.

Which is the most important part the EC complains about.

euyyn2• 10 years ago

Can't you just have two subcompanies, one that ships devices with Google apps and one that ships them without? Contracts signed by one of them shouldn't be able to bind the other, no?

bad_user4• 10 years ago

But the store is a proprietary and effectively closed app ecosystem completely under Google's control, thus the issue of monopoly exploitation.

Having a monopoly isn't illegal. Using that monopoly to gain an advantage in newer markets is. And the problem with this argument is that you're getting this backwards: when Android 1.0 shipped, Google already had a foothold with Search, Gmail and Maps. The whole purpose of Android was for Google to have a mobile platform to not get locked out of the mobile market. They aren't making money from licensing it and Android wouldn't exist if they couldn't use it for distribution of their apps and services. And the same conditions applied then, as in you want the Android Marketplace (now Google Play) then you have to also ship Google's apps, with HTC Dream (the very first Android phone) shipping with Search, Gmail, Talk, Maps, YouTube, Calendar and Contacts. Did they miss anything important in version 1.0?

The only part of the Android ecosystem that in any way really violates user freedoms

The "violations" on user freedoms that you're thinking of are subjective issues, not lawful ones. Android is the only mobile OS that allows for Firefox and for third-party app stores without jailbreaking it. Which means that users have the freedom to install and use any alternative they want, a freedom that's not available for the other mainstream mobile operating systems.

kuschku5• 10 years ago

The violations are that SAMSUNG can not ship devices with Kindle-Android.

You can only ship non-Google-droid devices if none of your devices use the Play Store, and you can only ship Play Store devices if none of your devices are non-Google-droid devices.

That’s what the EU complains about, and that’s what is worthy of several billion in punishment.

NiKMic2• 10 years ago

I'm not sure if I am understanding it well. Does the EU have an issue with Google Chrome coming pre-installed with Android? In that case, shouldn't Microsoft face the same penalties since IE/Edge comes pre-installed on the Windows OS? I believe that these pre-installed apps can't be uninstalled (because it might happen that you end up with no browsers on your phone), but would making the app uninstallable solve this issue? I know that on Windows I only use IE to install Chrome, then I ignore it for ever.

I think that it is only fair that Android are allowed to bundle soft of their software with each Android release. Then again, I hate bloat ware so I kind of understand that point of view too. Maybe Android versions can ship a blank OS (no pre-bundled apps) and you have the option to opt-in to a 'suggested' package which would include apps such as Chrome, search function etc.

I'm not 100% sure I understood the EU commission's problem here (or rather why they targeted specifically Android/Google). Feel free to correct me where I am wrong.

dublinben• 10 years ago

Microsoft already faced an antitrust suit about this issue several years ago. It resulted in the mandatory browser choice ballot when first starting a new Windows system.[0]

[0] https://en.wikipedia.org/wiki/BrowserChoice.eu

amelius• 10 years ago

Can't every app be considered a "browser" nowadays? I mean, every app contacts the internet, and displays results based on data from the internet.

I'm not sure if it is fair to draw the line at web browsers that render HTML.

davidgerard• 10 years ago

This was literally the EU case against Microsoft over IE bundling.

u_me_him2• 10 years ago

Neither do I. I would not be surprised at all if some company is behind this.

ocdtrekkie6• 10 years ago

As with most corporate law issues, there are plaintiffs that requested this investigation. Microsoft and several other companies complained.

But the reality is, what Google is doing IS illegal. It's illegal in the US too, but Google bought off the FTC Commissioner and fabricated some academic studies and donates to a large number of our current elected officials re-election campaigns. Aka: Our government won't touch them.

ricw• 10 years ago

The difference is the monopoly that Google has obtained in Europe with more than 80% market share. Similar to how Microsoft was fined for making the internet explorer the default on their platform and thereby dominating the market (windows) a decade ago, Google is likely going to be fined and forced to open their monopolistic platform to fairer competition.

The thinking behind this is that you can't have terms that prohibit competition when you are the monopoly. If you do, you need to accept competition. In a way it's because Google has been too successful in Europe. It'll be interesting to see how the EU thinks a fairer market can be obtained..

tdkl• 10 years ago

Except you can disable all that on Android and use other services/apps. It's also debatable if Android gained that market share because of this alleged forcing of their apps/services. I bet people chose Android because of price (Apple being a pricey alternative), more free apps/sideloading ability and they actually wanted tighter integration with Google services (fucking surprise).

The MS situation was similar in case that no-one used Windows just to use Internet Explorer, but the difference is that MS made it very unclear to disable/remove IE, not to mention the pain with setting the default apps (which came with XP SP2).

It's just an EU money grab (am EU citizen and only use Chrome).

xbmcuser• 10 years ago

   But is it the default the largest seller of android phones is samsung which makes all its own apps as default on its android phones. It even has its own appstore.

kyrra2• 10 years ago

Details are in the EU's press release: http://europa.eu/rapid/press-release_IP-16-1492_en.htm

The key points:

requiring manufacturers to pre-install Google Search and Google's Chrome browser and requiring them to set Google Search as default search service on their devices, as a condition to license certain Google proprietary apps;
preventing manufacturers from selling smart mobile devices running on competing operating systems based on the Android open source code;
giving financial incentives to manufacturers and mobile network operators on condition that they exclusively pre-install Google Search on their devices.

Bjartr• 10 years ago

It's the second and third points that I take issue (with Google) on. The first seems a reasonable way to try to ensure that if manufacturers want to benefit from the ecosystem Google has built they have to provide users with the experience Google intended. Less than that can reflect poorly on Google if the manufacturer provided ecosystem integration is lackluster or even intentionally restricted.

The other two points are problematic because they apply restrictions to business decisions the manufacturer can deliver independent of how those offerings do or do not rely on the ecosystem Google developed and are therefore Google leveraging its business position to reduce consumer choice in its favor.

patrickaljord2• 10 years ago

requiring manufacturers to pre-install Google Search and Google's Chrome browser and requiring them to set Google Search as default search service on their devices, as a condition to license certain Google proprietary apps;

Google gives away Android for free. If it can't put google search and ads on it, it won't be able to make money to keep funding Android. Banning Google Search from Android will cut its funding, not sure it would be such a smart move...

NiKMic2• 10 years ago

Thanks for that! As others mentioned, I'm fine with the first point but the other two I'm not too keen on.

yincrash• 10 years ago

Even worse is that iOS browsers cannot implement their own rendering system, so they are all locked to Safari's version of WebKit. At least browsers in Android can truly be different than both the in-system chromium based webview and Chrome itself.

mtgx• 10 years ago

Read EC's own press release instead:

http://europa.eu/rapid/press-release_IP-16-1492_en.htm

EGreg• 10 years ago

Woohoo say the bureaucrats, $8B for the EU which they can spend on their stuff now.

x0x02• 10 years ago

The temerity of those Europeans. Demanding companies that do business in Europe comport with European law!

kuschku5• 10 years ago

The actual issue the EC argues against – counter to many comments here – are the compatibility test suite issues.

If you want to sell at least one phone with the play store, all your other phones have to come with it, too.

You can’t just sell 50% with Kindle-Android, and 50% with Google Android.

This is severely hurting innovation and leads to an even larger monopoly.

kilotaras• 10 years ago

And if people still want to compare it to iPhone, imagine Apple having Samsung sign the agreement to not manufacture phone screens for anyone that's not Apple.

Mikeb85• 10 years ago

I'm curious exactly how they figure Google is abusing their position, when you can change all the default apps and search to anything you want, and manufacturers can create a fork and do anything they want with it (witness Ubuntu Phone, Firefox OS, Cyanogenmod, Amazon Kindle Fire OS or whatever it's called, etc...). All Google is requiring is certain conditions to be able to call it 'Android', not unlike Mozilla and Firefox branding.

kuschku5• 10 years ago

and manufacturers can create a fork and do anything they want with it

That’s exactly what Google prohibits.

If you want to sell one or two phones with the Play Store, all your other phones have to adhere to Google’s rules, too.

You can’t ship 50 phones with Play Store and 50 phones with Kindle-Android.

Amazon couldn’t use any of the major OEMs for building their Kindle devices for this same reason.

known• 10 years ago

Sounds rational.

"European Union antitrust regulators said that by requiring mobile phone manufacturers to pre-install Google Search and the Google Chrome browser, the U.S. company was denying consumers a wider choice of mobile apps and stifling innovation."

dang2• 10 years ago

There is a parallel post discussing Google's response at https://news.ycombinator.com/item?id=11533469.

epalmer• 10 years ago

In the US here. I just went from being an iphone user of long standing to a android user mostly because I want google apps over at least iphone apps. Especially the map apps. I did install firefox asap on my nexus 6p but I use chrome and firefox both.

I love the bundle. I was happy with the iphone bundle but I did not love it.

My youngest daughter is very happy I came over to the darkside. She has been an Android user for a few year.

u_me_him2• 10 years ago

You can get all the google apps in the iphone

euyyn2• 10 years ago

And in fact the new Maps shipped first on iOS.

thesimon• 10 years ago

But you can't set Google Maps as the default map application or Chrome as the default browser. In fact, Chrome is basically only a nice wrapper around Safaris engine.

bad_user4• 10 years ago

I've been an Android user, but currently using an iPhone 6s received as gift.

You can get Google's apps, but isn't the same thing. Their apps are a lot more polished on Android. In particular for Gmail the difference has been night and day. On iPhone I don't even bother with Gmail, I just use the default email app.

turaw• 10 years ago

Just digging through the fact sheet released by the European Commission [1] to gain a more concrete understanding of what the investigation is trying to turn up. Quotes are heavily edited; please read the full document before forming opinions :3

Licensing of Google’s proprietary apps:

The Commission seeks to ensure that manufacturers are free to choose which apps they pre-install on their devices.

Anti-fragmentation:

The Commission has found evidence that Google's conduct prevented manufacturers from selling smart mobile devices based on a competing Android fork ... In doing so, Google has also closed off an important way for its competitors to introduce apps and services, in particular general search services, which could be pre-installed on Android forks.

Exclusivity:

The Commission takes issue not with [financial incentives to ... smartphone and tablet manufacturers ... on condition that they exclusively pre-install Google Search] in general but with the conditions associated with Google's financial incentives, in particular with the condition that the financial incentive is not paid if any other search provider than Google Search is pre-installed on smart mobile devices.

[1] http://europa.eu/rapid/press-release_MEMO-16-1484_en.htm

blisterpeanuts• 10 years ago

From the article: Complainant FairSearch said Google was hindering the development of versions that might lead to new operating systems able to compete with Android, despite launching it as an open source project.

Is this the basis of the charges? That Google, by requiring the bundling of its own (free) apps and search engine, is preventing some obscure company from potentially developing a potentially competitive OS?

EU seems to regard Google's insistence on a uniform OS with certain basic services common to every device that calls itself Android as "harmful to the consumer". Even though more forking of Android would lead to more fragmentation, which most of us would agree is bad for the consumer.

I fail to see what crime Google has committed, other than to run afoul of a bunch of bureaucrats who have nothing better to do than regulate, tax, and sue private companies for being too successful, at the behest of tiny competitors who are unable or unwilling to succeed through innovation.

cromwellian• 10 years ago

I just came back from China, in which most of the phones I used did not have Google Play, or Play Services, and had replacements for everything.

If you try to use an phone with Google Play in China, you need a VPN, since if the app calls things like location services, it'll get blocked, for example, Taxi hailing apps could not retrieve the location, however with a native-phone, they work.

Needless to say, the experience of the fork of all of these services is inconsistent between devices and makes it less easy to move between phone vendors. One paradoxical outcome could be that you could get locked into XiaoMi, Huawei, etc.

Also, the experience of 9 different appstores is kind of jarring. I think it would be better if apps simply worked like the Web, and could be safe enough to stream-through and purchased through distributed payment systems.

takno3• 10 years ago

I'd go back to a feature phone rather than locked into Xiaomi. Even with access to the Google apps it's a disaster area

newjersey2• 10 years ago

I've never seen a xiaomi phone in person. It looks pretty good from the website. Care to elaborate about your experience?

ralfd2• 10 years ago

Interesting. How does iOS work in China?

EU hits Google with second antitrust charge

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