After a four year investigation, European Union regulators are poised to demand sweeping changes in the way Google licenses the Android mobile OS to device makers. That's according to a report in Reuters, which says the European Commission will likely charge Google with abusing its monopoly power in mobile devices by forcing companies to bundle its apps and services.
"Since Android's introduction, greater competition in the smartphone market has given consumers more and better choices," a Google statement notes, defending its bundling practices. "Both the U.S. FTC and Korean Fair Trade Commission have examined Google's agreements around Android in depth and concluded that there was no cause for legal concern."
The European Union isn't convinced.
According to the Reuters report, European Commission regulators have stepped up their investigation of Google Android in the months leading up to the selection of a new EC antitrust chief in November. And they're now asking far more detailed questions of Google's competitors than they did during similar ramp-ups in 2011 and 2013.
At issue: Whether Google abuses its 80 percent market share in mobile in the EU—a monopoly—by bundling its own apps and services in Android and then requiring that device makers not install apps or services that compete with Google's. The agency is seeking any evidence and documentation that these companies may have about the long-term repercussions of Google's bundling strategy, dating back to 2007.
The EU investigation appears to be examining the difference between the Android Open Source Project (AOSP), which is free but crippled by the lack of an apps store and key Google apps and services, and "real" Android. The latter is not free, and comes with specific and strict licensing rules that require the installation and exact placement of certain Google apps and services on devices.
Google's policies today closely mirror the Windows bundling policies that Microsoft followed for years, which was the subject of antitrust suits in the United States, EU, South Korea and elsewhere. Those suits and the resulting regulatory oversight essentially crippled Microsoft for the better part of a decade, leading to rise of—wait for it—Google.
The Reuters report should be cheered by anyone wondering why the EU came down so hard on Microsoft for its similar abuses in the desktop PC market, but has thus far treated Google with kid gloves. After all, while Microsoft's policies a decade ago might have affected some tens of millions of people in the EU, Google's reach today in the EU numbers in the hundreds of millions. And as the search firm itself noted, "Anyone can use Android without Google, and anyone can use Google without Android." So the chances for abuses multiply when you factor in its full product line.
According to Reuters' sources, the EU investigation of Android will enter the next phase—i.e. formal charges—once the long-running battle over Google Search is concluded. In that case, current EU competition commissioner Joaquin Almunia had hoped to reach a settlement with Google, but numerous and repeated complaints from competitors who feel the deal was too lenient may force the EU to seek further concessions.
Regardless of what happens with search, the next big fight is of course in mobile. Let's just hope the EU doesn't drag this one out for several more years and give Google a chance to abuse its monopoly power in other markets in the meantime. I admire the Commission's desire to impose competitive fairness, but the agency, like all of the EU, moves at a snail's pace.
