Google Hit With EU Predatory Pricing Complaint Backed by Microsoft

Microsoft and a group of other competitors filed a complaint with the EU concerning Google's free Android mobile operating system.

Google is now being hit on a second regulatory front in Europe as a group of competitors, including Microsoft, has filed a complaint with European authorities that argues that Google's free Android mobile operating system is illegally trying to dominate the market through deception and predatory pricing.

The new complaint was filed by a group called FairSearch Europe with the European Commission, the antitrust arm of the European Union, even as the EU continues its almost two-year-long probe into Google's search practices in Europe.

The group alleged in its complaint that Google is following an "anti-competitive strategy to dominate the mobile marketplace and cement its control over consumer Internet data for online advertising as usage shifts to mobile."

The complaint before the EC comes as the marketplace rivalry between Google and Microsoft appears to be growing exponentially.

Just last month, reports surfaced that it was Google that had turned Microsoft in involving a recent case in which Microsoft had failed to offer a choice of Web browsers to early users of its Windows 7 computer operating system, which the company must do as part of a 2009 settlement regarding the same issue. In that case, the EU fined Microsoft $732 million. Microsoft apologized for what it called a "technical error" that led to the problem in about 28 million PCs that were using early versions of Windows 7 with Service Pack 1, and also took "full responsibility" for the issue. Under the 2009 settlement, Microsoft was required to display a Browser Choice Screen (BCS) on PCs in Europe, where Microsoft's Internet Explorer is the default browser, and while it did in some cases, it failed to do so in others.

The latest charges from FairSearch Europe are adding more fuel to the fires that are being generated by the two tech titans around the world.

"Google is using its Android mobile operating system as a 'Trojan Horse' to deceive partners, monopolize the mobile marketplace, and control consumer data," said Thomas Vinje, the counsel for the FairSearch coalition, in a statement. "We are asking the Commission to move quickly and decisively to protect competition and innovation in this critical market. Failure to act will only embolden Google to repeat its desktop abuses of dominance as consumers increasingly turn to a mobile platform dominated by Google's Android operating system."

The group cites market statistics from Strategy Analytics that show that Android is the dominant smartphone operating system, running on 70 percent of units shipped at the end of 2012.

FairSearch, which is made up of 17 search and technology companies around the world, including Expedia, Microsoft, Nokia, Oracle and TripAdvisor, argues that Google reached that market domination by giving Android for free to device makers. "But in reality, Android phone makers who want to include must-have Google apps such as Maps, YouTube or Play are required to pre-load an entire suite of Google mobile services and to give them prominent default placement on the phone," according to the group. "This disadvantages other providers, and puts Google's Android in control of consumer data on a majority of smartphones shipped today."

By giving Android away for free, it "makes it difficult for other providers of operating systems to recoup investments in competing with Google's dominant mobile platform," according to the complaint.

"European consumers deserve a rigorous investigation of Google's mobile practices, and real protections against further abuses by Google," Vinje said in the statement. "Given Google's track record of ignoring the law, mobile Internet users should be very concerned."