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

Advertising

Advertising

Advertising

Advertising

Advertising

Advertising

Advertising

the European Sting Milestones

Featured Stings

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

MEPs urge UK to break current deadlock

China will be the world’s top tourist destination by 2030

What business leaders can learn from jazz

Parliament sets conditions on EU-China investment deal

Antitrust: Commission consults stakeholders on guidance for national courts when handling disclosure information

EU and World Health Organisation team up to boost access to health services in developing countries

Nigel Farage and Boris Johnson: who forced the two ‘brave’ Brexiteers to quit?

Online shopping across the EU to be easier from 3 December

EU Elections: new rules to prevent breaches of data used to influence elections

Cloud computing under scrutiny in the EU?

What could a no-deal Brexit mean for developing countries?

Right2Water initiative: Is the Commission ready to listen to citizens?

OECD leading multilateral efforts to address tax challenges from digitalisation of the economy

Sexual abuse of elderly likely to ‘grow dramatically’, UN expert says

EU’s Finance Ministers draft plan to raise tax bills of online giants like Google and Amazon

UN ceasefire monitoring chief tours Yemeni port of Hudaydah

Deepening Europe’s Economic and Monetary Union: Commission takes stock of progress

Gender Equality as a platform to improve Medicine

Every bite of burger boosts harmful greenhouse gases: UN Environment Agency

The Commission neglects the services sector and favours industry

Prisoner executions in Belarus ‘simply unacceptable’, says UN rights body

Ocean life faces ‘onslaught of threats’ from human activity, but tools exist to save it

FROM THE FIELD: Faces and Voices of Conflict

Primary Health Care: in a world of specializations

State aid: Commission approves €380 million German rescue aid to Condor

Financiers can turn the world into a dirty and dangerous place

Is it impossible to place the banks under control?

Why banks escape from competition rules but not pharmaceutical firms

MEPs back plans to promote water reuse for agricultural irrigation

World response to AIDS epidemic at a ‘critical juncture’

2nd Global Consultation on Migrant Health 21-23 February 2017 in Sri Lanka

Air pollution could be responsible for 1 in 7 new cases of diabetes

Discussion at Europe House: Brexit & Food

Spirit unlimited

How UN cultural treasures helped set the stage for Game of Thrones

Hunger, displacement and disease: 4.3 million people remain in dire need of aid in Chad

EU to negotiate an FTA with Japan

Half the population of Yemen at risk of famine: UN emergency relief chief

Madagascar: UN chief commends leaders, State institutions following ‘historic milestone’ election

EU Court of Justice invalidates Safe Harbour and the game for thousands US businesses suddenly changes

It’s time to ditch our obsession with trade deficits. Here’s why

COP21 Breaking News_08 December: Cities & Regions Launch Major Five-Year Vision to Take Action on Climate Change

Who holds the key to the future of biotechnology? You do

Utmost hypocrisy emitted by EU’s energy regulation

European Parliament approves more transparency and efficiency in its internal rules

The health of the human being in coexistence with a transformative biosphere

How biotechnology is evolving in the Fourth Industrial Revolution

These are the cities where people work the longest hours

EU budget 2020: Commission focuses its proposal on jobs, growth and security

Why Nordic nations are the best places to have children

Britain and Germany change attitude towards the European Union

Mandela, ‘true symbol of human greatness’, celebrated on centenary of his birth

Four ways innovation can help to beat heart disease

EU is now giving Google new monopolies to the detriment of European citizens and Internet companies

Take action on air pollution to save lives, and the planet, urges UN chief

European Union disenchanted with Turkey

Christmas spending: Who can afford not to cut?

Entrepreneur India Convention 2016: Bringing together Entrepreneurs, Investors, Startups and SMEs

6 ways to ensure AI and new tech works for – not against – humanity

How digital remittances can help drive sustainable development

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