Coverage: EU charges Google for abusing mobile app market

Google is once again facing charges from the European Union for abusing the dominance of its Android mobile operating system within the mobile app market.

The Mountain View, California-based company was formally charged last April for using its dominance as a search engine to favor its comparison shopping system. Google denied those charges.

Foo Yun Chee of Reuters had the day’s news:

The European Union charged Google on Wednesday with abusing the dominant position of its Android mobile operating system, opening a second front against the U.S. technology giant that could lead to large fines.

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.

Google is already facing EU charges over the promotion of its shopping service in Internet searches at the expense of rival services, in a case that has dragged on since late 2010 despite three attempts to resolve the issues.

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.

Kevin Rawlinson of BBC News explained the European Union’s position:

She told reporters: “A competitive mobile internet sector is increasingly important for consumers and businesses in Europe.

“Based on our investigation thus far, we believe that Google’s behaviour denies consumers a wider choice of mobile apps and services and stands in the way of innovation by other players, in breach of EU antitrust rules.

“These rules apply to all companies active in Europe.”

According to the European Commission, Google has about a 90% share in the markets for general internet search services, licensable smart mobile operating systems and app stores for the Android mobile operating system, making it dominant.

Ms Vestager said the issue was particularly important because smartphones and tablets accounted for most global internet traffic, and were expected to account for even more in the future.

She said about 80% of smart mobile devices ran on Android.

Natalia Drozdiak and Sam Schechner of The Wall Street Journal explained the EU’s aggressive stance on US technology companies:

The charges also escalate the EU’s broader effort to rein in a cadre of large U.S.-based tech firms that regulators and politicians accuse of running roughshod over national and international rules in areas spanning competition, privacy and taxes. Several EU privacy regulators are pursuing Facebook Inc. for alleged violations of national privacy laws, while the EU’s antitrust officials are investigating the tax affairs of Amazon.com Inc. and Apple Inc.

At the same time, countries such as Spain, France and Germany have clashed with online-service firms such as Uber Technologies Inc. and Airbnb Inc. that have threatened regulated industries including taxis and hotels. Meanwhile, tax authorities in France and other countries are trying to claw back hundreds of millions of euros in alleged back taxes from companies including Google.

Critics have accused the EU of pursuing a protectionist agenda aimed at kneecapping U.S. companies. Those critics, including tech executives, point in part to the decision Tuesday by Canada’s competition authority to close its probe of Google’s practices, including with regard to Android. But Ms. Vestager dismissed those objections.

“It is not our job to defend companies. It is our job to protect competition,” she said. “If dominance is abused, then we have an issue.”

Ms. Vestager has been aggressive in pursuing potential antitrust violations. Last April, when Ms. Vestager first opened a formal probe into Android, she also filed separate formal charges against Google for allegedly abusing its position as the leading search engine by favoring its own comparison shopping service. Google rejects those charges.

The EU is also investigating other parts of Google’s business, including whether the company leverages its dominance in search in other areas including copying of web content, display of travel, mapping and local search results and whether Google obstructs website operators from placing ads on their websites that compete with Google’s advertising business.

Google could face fines up to 10% of the company’s annual global revenue for each of the formal charges issued. The company could also seek to negotiate a settlement in both the Android and shopping cases. Last year, Alphabet reported $74.54 billion in world-wide revenue for its Google segment.