Competing with Apple and leading innovation: Google’s world replies to EU on android charges

From Google's corporate blog.

From Google’s corporate blog.

It was not a surprise or an unexpected twiddle, when last week Google like a fine-tuned clockwork delivered its formal reply to the European Commission, regarding the Android antitrust case. With a blog post on Thursday, the US tech giant has officially dismissed the third set of formal charges by the European Commission, saying that Android operating system “hasn’t hurt competition”, as widely expected. Google’s statement follows its formal response about ten days ago, to allegations in two other cases related to its shopping search service and advertising products, and represents the latest chapter of a story, where the risks for the US firm are still very high.

Background

Last April, the European Commission accused Google of using its dominant Android mobile operating system to block competitors. The preliminary view by the European Commission was that the Mountain View, California-based company had abused its dominant position and unfairly restricted competition by pre-installing Android apps on smartphones. “The commission is concerned that Google’s behaviour has harmed consumers by restricting competition and innovation”, Margrethe Vestager, the EU competition Chief, said at those times. “Rival search engines and mobile operating systems have not been able to compete on their merits”. Google was then given a 12 week time frame to respond to the Commission’s charge sheet, a deadline that was ultimately extended by the European watchdog to last week.

Google’s voice

Kent Walker, senior Vice President and general counsel for Google, once again was Google’s voice, and once sounded pretty clear. “Android ecosystem carefully balances the interests of users, developers, hardware makers, and mobile network operators”, he said. “Android hasn’t hurt competition, it’s expanded it”. According to Mr. Walker, Android operating system has worked indeed like a stimulus to competition, rather than being a threat to it, given its flexible nature. “Android has unleashed a new generation of innovation and inter-platform competition”, he said. “By any measure, it is the most open, flexible, and differentiated of the mobile computing platforms”, he added.

Competing with Apple

In his response to the European Commission last Thursday, Mr. Walker objected to basically all of the EC’s premises, but mainly he focused his analysis on the scheme of competition in Europe itself. Indeed Walker argued that Brussels accusations are based on the idea that Android doesn’t compete with Apple. “The Commission’s case is based on the idea that Android doesn’t compete with Apple’s iOS. We don’t see it that way. We don’t think Apple does either. Or phone makers. Or developers. Or users”. Walker said. “In fact, 89% of respondents to the Commission’s own market survey confirmed that Android and Apple compete. To ignore competition with Apple is to miss the defining feature of today’s competitive smartphone landscape”, he added.

The right balance?

The Californian firm also claims that the European Commission doesn’t take into consideration the weight of Android apps that are pre-installed on smartphone on the whole of them. Google’s post on the company’s official blog offered an intuitive comparison between a typical Android smartphone and products from rivals Apple and Microsoft. According to Google, 11 out of 38 pre-installed apps on a Samsung Galaxy S7 smartphone with Android 6.0.1 operating system are from Google. The same post by Google showed that 39 out of 39 pre-installed apps are from Apple on iPhone 7 carrying iOS 10.0.2 , and 39 out of 47 pre-installed apps on the Microsoft Lumia 550 are from Microsoft.

“The Commission argues that we shouldn’t offer some Google apps as part of a suite. No manufacturer is obliged to preload any Google apps on an Android phone. But we do offer manufacturers a suite of apps so that when you buy a new phone you can access a familiar set of basic services”, Mr. Walker declared. “Android’s competitors, including Apple’s iPhone and Microsoft’s Windows phone, not only do the same, but they allow much less choice in the apps that come with their phones”, he also added.

Risky changes

The Android probe is a very thorny one for Google, not only because is the third of three that the US tech giant facing in the European Union, but actually because it may involve radical changes to the way it does business in the Old Continent. If Brussels upholds the complaint, Google could be fined up to $7.4 billion (€ 6.8 billion), the equivalent of 10% of its global revenue, but, as crazy as it sounds, this could be not the worst for Google.

Android’s numbers are astonishing, and the Android spin-offs are an immensely lucrative business for Google. Around 24,000 devices from over 1,300 brands run on Android, and some 75 percent of the phones in the EU already use Android. Moreover, its share of the market keeps growing year after year. The risk of being forced to change the way smartphones are equipped with Android, and to lose a preferential contact with millions of potential new consumers would be something unthinkable for Google. According to the Wall Street Journal, there’s also evidence that the Californian tech giant would likely also face costs associated with years of legal battles not only against the EU, but also against private litigants seeking compensation for damages.

Settling the dispute

Although there’s rumours a decision would have already been taken by the Commission, trying to settle the cases with the European watchdog could be a solution for Google. Gazprom case, just a few weeks ago, where the Russian giant managed to find an agreement with the EU to end a five-year antitrust case, represents a robust example of coming to terms. Of course Google would have to apply some changes to the way business is delivered in Europe at the moment, but risks could be substantially lower. Natalia Drozdiak and Sam Schechner by the Wall Street Journal have a point here, and believe that Google would have to pledge for changes and would only get hit with a fine if it goes back on its promise. Although this is still very hard to see, finding an agreement with the Commission would surely absolve Google from admitting guilt, and would also make it harder for anyone to claim damages and reparations in the future.

The EU must now weigh Google’s responses to its allegations against AdSense, Android and all other online advertising services by the US firm, before it comes out with a response that could bring a complete change to the face of current business. And the object is definitely not only Google’s, but indeed the face of competition in the European digital market.

Advertising

Advertising

Advertising

Advertising

Advertising

Advertising

the sting Milestone

Featured Stings

Can we feed everyone without unleashing disaster? Read on

These campaigners want to give a quarter of the UK back to nature

How to build a more resilient and inclusive global system

Stopping antimicrobial resistance would cost just USD 2 per person a year

EU mobilises €9 million to tackle the food crisis in Haiti

How the inventor of the internet plans to make it safe and accessible for everyone

The sad plight of fledging doctors

Why businesses are nothing without strong human rights

Half of all mental illness begins by the age of 14

Insurer CEOs Reveal Marketing Strategies that Communicate the True Value of Insurance Products & Services to the Customer

This new way of understanding disease is changing medicine

World cannot be transformed without ‘ingenuity of the countries of the South’: UN Chief

How bad is the Eurozone economy? The ECB thinks too bad

“Decisions taken in the coming weeks will shape Europe’s experience of the internet”, Joe Mcnamee from EDRi says live from European Business Summit 2015

Plastic waste from Western countries is poisoning Indonesia

Civil society organisations disenchanted with “Youth Guarantee”

A Sting Exclusive: Paris Climate Change Summit, a defining moment for humanity, by Ulf Björnholm Head of UNEP Brussels

Tax reforms accelerating with push to lower corporate tax rates

How robotics can help humanitarians bridge the digital divide

EU accused of being too nice with Gazprom in the infamous antitrust case

Berlin and Paris pursue the financial fragmentation of Eurozone

How the Irish people were robbed by banks, the Commission and their own government

EU report: Implementation of reforms continues to bring EU and Ukraine closer together

Young? You should work out the entrepreneurial heart before the mind

Take medical use of cannabis seriously, say MEPs

Libyan authorities must shoulder the burden to support country’s ‘vulnerable’ south

Chart of the day: These countries have the highest share of electric vehicles

‘Refrain from violence’ UN chief urges, as presidential election result is announced in DR Congo

Aid teams respond to escalating southwest Syria conflict: 750,000 civilians are at risk

Island nations on climate crisis frontline ‘not sitting idly by’

How blockchain can manage the future electricity grid

EU–Canada Summit: strengthening the rules-based international order

UN ‘prioritizing needs’, ramping up aid, as Hurricane Dorian continues to batter the Bahamas

Venezuela: Parliament calls for urgent EU help for people fleeing the country

Amid ‘volatile’ environment, UN mission chief urges Iraqi leaders to ‘listen to the voice of the people’

‘Much more’ can be done to raise awareness about the plight of persons with albinism: UN chief

Syria war: executions condemned as violence continues ‘on both sides’ of border with Turkey

OECD Steel Committee concerned about excess capacity in steel sector

A day in the life of a Rohingya refugee

The EU learns about fishing and banking from tiny Iceland

ECB is about to lend trillions to banks

OECD, BSR and Danone launch 3-year initiative to strengthen inclusive growth through public-private collaboration

Quality Internships: Towards a Toolkit for Employers

Bosnia and Herzegovina: MEPs concerned by slow progress in EU-related reforms

Trump’s Syrian hit the softest option vis-a-vis Russia

Lagarde: Keep feeding the banks cut down wages and food subsidies

This is how Britain saved some of its most precious wildlife from the threat of extinction

IMF: All you want to know about Argentina

Sahel States need international support ‘now more than ever’– UN peacekeeping chief

ECB readies itself for extraordinary monetary measures defying Germany

Who is to pay the dearest price in a global slowdown?

The US banks drive the developing world to a catastrophe

No agreement in sight on EU budget

The Fourth Industrial Revolution is redefining the economy as we know it

Why financial services can kickstart Africa’s digital economy

At last Germany to negotiate the costs for a really cohesive Eurozone

EU: Huge surplus in the trade of services with the rest of the world

The succesful cooperation

It’s a frenzied clash between moderates and no-deal Brexiteers

LGBTQI+ and medicine

India can soar in the robot age. This is how

10th ASEM in Milan and the importance of being one: EU’s big challenge on the way to China

‘From farm to plate’, first-ever World Food Safety Day demonstrates the need to take unsafe food off the menu

Respond to ‘legitimate grievances’ of Sudanese people, UN human rights experts urge, following protests

More Stings?

Trackbacks

  1. […] tech giant quickly enough. But despite such openness by Brussels, the road ahead remains tough for Apple after the EU’s highest court rejected a request by US government to help the tech giant in its […]

Speak your Mind Here

Fill in your details below or click an icon to log in:

WordPress.com Logo

You are commenting using your WordPress.com account. Log Out /  Change )

Google photo

You are commenting using your Google account. Log Out /  Change )

Twitter picture

You are commenting using your Twitter account. Log Out /  Change )

Facebook photo

You are commenting using your Facebook account. Log Out /  Change )

Connecting to %s