Google's Android Could Be Affected in European Antitrust Deal: Report

Google continues to negotiate with the European Union about its alleged anti-competitive behavior. A potential settlement directly involving Android, however, could make things "messier" for Google.

A settlement deal being negotiated between Google and the European Union to resolve antitrust issues could now be expanded to include Google's Android mobile technologies, in addition to Google search platforms.

"The outcome is finely balanced and will partly depend on Google's willingness to extend the scope of the settlement to mobile services," according to a July 19 report in The Financial Times. "The late maneuver by Joaquin Almunia, the EC's competition commissioner, presents Google with a dilemma as tense settlement negotiations enter their final days."

Earlier this week, Google again updated a list of proposed actions the company would take in response to the EU's antitrust concerns. The latest list comes two weeks after Google submitted an earlier list to the agency that failed to garner the EU's full satisfaction.

Google is trying to come up with a concessions package that is acceptable to both the company and the European Commission, the antitrust agency of the EU. This deal would allow Google to potentially avert charges of anti-competitive behavior.

Both sides are apparently not commenting publicly on the continuing negotiations.

Carl Howe, a mobile analyst with Yankee Group, said the tense negotiations between Google and the EC "just shows how aggressive Europe is about maintaining a level platform" in the marketplace. "The EU is more aggressive about enforcing noncompetitive acts," compared with other regions of the world.

A prime example is that the agency is "still beating up on Microsoft about [its] Internet Explorer [Web browser] in Windows 7" by ensuring there are options for consumers to have access to other browsers as their default applications, said Howe.

In the Google case, the EU is saying that Google has to be a neutral broker regarding search results and not steer users primarily to its own content and paid ads, "which is unfortunately easier said than done," said Howe. "Google's argument is that they're providing the best results and that they just happen to be using their properties. The problem is that there may not be an objective best answer."

The complication in this antitrust case, said Howe, is that it's not only about Google's search practices.

"Where it gets messier is with Android, because Android is not in any way, shape or form being portrayed as a neutral platform" like Google's search architecture, said Howe. "I don't think [that Google] feels as much compulsion to be a neutral partner on Android," which is something that the European agency wants to see. "It gets to be a much tougher determination [of alleged anti-competitive behavior] when you get outside the browser."

Maribel Lopez, principal analyst with Lopez Research, has a different view.

"The main 'concession' is on changing search," Lopez wrote in an email. "This isn't really [about] changing Android. It's simply extending how it does that search to its phones. In truth, search will largely change on mobile anyway as we do more with location coupled with understanding preference from prior transactions you've done with the phone."

Earlier this month, Google executives sent a list of initial concessions to address potential antitrust concerns from the EC. At that time, Google Chairman Eric Schmidt sent a letter to the EU's Almunia, outlining steps the massive Web company would be willing to take to resolve the EU's concerns, including claims that it favors its own search results over others.

The EU investigation centers on what they regard as Google's dominant position in search.

Almunia in May had given Google officials until early July to address that and other concerns, including the use of material from other search engines in its results and its dominance in Web advertising, all of which investigators have said put competitors at an unfair advantage.

Since that time, Almunia again spoke to Google's Schmidt and asked for more clarification of Google's proposals from early July.

Google officials are under investigation in Europe, the United States and elsewhere regarding its search engine, which holds more than 60 percent of the search market, with Microsoft's Bing being a distant second. Competitors have claimed that Google works its search algorithms to favor its own products and results over those of others, giving it an unfair advantage in search and Web advertising.

A guilty verdict on such charges could mean a fine of up to 10 percent of Google's annual revenue, which based on its 2011 annual results, would amount to about $4 billion, according to Reuters.