After six years of wrangling with European antitrust regulators, it appears that Google is about to be fined for its insistence that Android phone makers include its Chrome browser and because of how it handles shopping inquiries for hotels and flights, among other items.
Adding to the problem, Google’s parent company, Alphabet, was charged a few days ago with using Android to squeeze out rivals, according to a report in Reuters.
The problem seems to be that Google is willing to enter into a consent decree in which it does not admit fault, which is the way things work in the United States. Things are different in the EU, however, and regulators there are insisting that Google admit that it was at fault for its conduct and that the company explain how it’s going to change things.
European Competition Commissioner Margrethe Vestager, meanwhile, has been receiving a steady stream of complaints from European and U.S. companies about Google’s practices. Because of this, she’s probably not going to scale back the EU’s demands.
So what’s going on here? After all, isn’t Google doing exactly the same thing as Microsoft and Apple? Well, no, they’re not.
While Microsoft does include a browser and lots of apps with the copy of Windows 10 that runs on phones, its market share is so tiny it may be in negative numbers. In addition, until Microsoft and Google agreed to stop suing each other, Microsoft was one of the companies complaining about Google. Apple’s phones aren’t being built by anyone but Apple, so the company isn’t in a position to use iOS or its own apps to dominate other companies.
Google provides Android to lots of phone makers and requires that some of its own software and search be included. This makes it the one mobile operating system company that has crossed the line and incurred the ire of European regulators.
It’s also probably no coincidence that European regulators are less than totally enamored with the idea of a dominant American company pushing around smaller non-American companies, a few of which are European.
Other U.S. companies, notably Microsoft, have long since learned to their grief that the EU doesn’t appreciate American dominance. This is one reason why European computer users are able to buy Windows in Europe without Microsoft’s browsers. That company, eventually paid billions in fines after its 10-year-battle with the same EU Competition Commission.
There’s little doubt that Google will also end up paying billions of its own. The EU has little reason to compromise with Google, since the company doesn’t really have anything to offer the EU in terms of a settlement, except, of course, its money and a change in behavior. Worse, if Google tries to go to court to get the commission off its back, its chances of winning are slim.
So what’s going to happen? Google will be forced into a settlement of the EU’s choosing at some point in the future. If Google plans to keep selling its software and services in Europe, it will have to agree to whatever terms the EU demands, which will include fines, probably in the billions. It will have to change the requirement that companies making and selling mobile phones in Europe include its browser and search service.
Google’s Antitrust Worries Won’t Go Away Just By Paying Huge EU Fines
Exactly how that will work out remains to be seen, but it’s likely one of two things will happen. First, it may be possible that Google can continue to include its own browser and search on devices as long as it also allows other products with similar capabilities to be installed on the devices and made the default choice when the Android phone comes out of the box.
The other option is that Google will be forced to allow phone makers to include whatever browser and search engine the makers wish. Samsung, for example, might be allowed to include its own browser instead of Google’s or it might be allowed to include a third-party product in addition to Google’s. To the Europeans, the problem isn’t so much with Google’s products as it is that there’s no choice.
But Google won’t be able to finally put these charges behind it even if it pays immense fines and agrees to all of the EU’s settlement terms. That’s because in the United States, the Federal Trade Commission is already talking with the company’s rivals and customers to determine whether Google is misusing its dominant position, according to a report in The Wall Street Journal.
The FTC investigation could easily turn into an antitrust case if the agency finds that Google is indeed misusing its position as the dominant provider of mobile operating software. This possibility should cause Google some real concern.
While the reality of Google’s situation depends on whom you believe, the fact is that Google has become widely mistrusted as a fair agent for handling information. The company has already admitted that it mines Gmail for advertising leads and it will target ads based on what users have browsed and searched for on the Web.
In addition, Google has been the target of a number of intellectual property actions with authors and publishers charging that Google has violated fair-use rules.
If anything, this is made worse by Google’s attempts to portray itself as a benevolent organization. While Google may not be as evil as some claim, the fact is that the company’s dominance in search has raised concern among many Web users and active opposition by a few.
It seems like the first thing Google needs to do is to stop pretending to be an innocent handler of information and admit to what it’s really up to. People aren’t going to stop using Google, but at least, they’ll know what to expect.