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EU Regulators Fine Google Record $5 Billion in Android Case (reuters.com)
The European Union hit Alphabet's Google with a record antitrust fine of $5.06 billion on Monday, a decision that could loosen the company's grip on its biggest growth engine: mobile phones. From a report:The European Commission ordered Google to end the illegal conduct within 90 days or face additional penalties of up to 5 percent of parent Alphabet's average daily worldwide turnover. The EU enforcer also dismissed Google's arguments citing Apple as a competitor to Android devices, saying the iPhone maker does not sufficiently constrain Google because of its higher prices and switching costs for users. The European Commission finding is the most consequential decision made in its eight-year antitrust battle with Google. The fine significantly outstrips the $2.8B charge Brussels imposed on the company last year for favoring its own site in comparison shopping searches. The decision takes aim at a core part of Google's business strategy over the past decade, outlawing restrictions on its Android operating system that allegedly entrenched Google's dominance in online search at a time when consumers were moving from desktop to mobile devices. Android is the operating system used in more than 80 per cent of the world's smartphones and is vital to the group's future revenues as more users rely on mobile gadgets for search services. Google has denied wrongdoing.
The European Commission took issues with the following practices: In particular, Google:
1. has required manufacturers to pre-install the Google Search app and browser app (Chrome), as a condition for licensing Google's app store (the Play Store);
2. made payments to certain large manufacturers and mobile network operators on condition that they exclusively pre-installed the Google Search app on their devices;
and 3. has prevented manufacturers wishing to pre-install Google apps from selling even a single smart mobile device running on alternative versions of Android that were not approved by Google (so-called "Android forks"). Update: Google has announced that it would be appealing against the record fine. In a statement, the company said, "Android has created more choice for everyone, not less. A vibrant ecosystem, rapid innovation and lower prices are classic hallmarks of robust competition. We will appeal the Commission's decision."
Update 2: In a blog post, Sundar Pichai, CEO of Google, said, the European Commission's decision ignores and misses several facts. He wrote: Today, the European Commission issued a competition decision against Android, and its business model. The decision ignores the fact that Android phones compete with iOS phones, something that 89 percent of respondents to the Commission's own market survey confirmed. It also misses just how much choice Android provides to thousands of phone makers and mobile network operators who build and sell Android devices; to millions of app developers around the world who have built their businesses with Android; and billions of consumers who can now afford and use cutting-edge Android smartphones. Today, because of Android, there are more than 24,000 devices, at every price point, from more than 1,300 different brands, including Dutch, Finnish, French, German, Hungarian, Italian, Latvian, Polish, Romanian, Spanish and Swedish phone makers.
[...] The free distribution of the Android platform, and of Google's suite of applications, is not only efficient for phone makers and operators -- it's of huge benefit for developers and consumers. If phone makers and mobile network operators couldn't include our apps on their wide range of devices, it would upset the balance of the Android ecosystem. So far, the Android business model has meant that we haven't had to charge phone makers for our technology, or depend on a tightly controlled distribution model. [...] Rapid innovation, wide choice, and falling prices are classic hallmarks of robust competition and Android has enabled all of them. Today's decision rejects the business model that supports Android, which has created more choice for everyone, not less. We intend to appeal. Update 3: The French government said on Wednesday that it welcomes the record fine imposed on Google by European Union regulators, with a government spokesman describing it as an "excellent decision."
A number of companies, and startups that compete with Google have weighed in on the development. Open Markets Institute Executive Director Barry Lynn, said, "We hope U.S. enforcers of competition law will learn from and follow this example in both of these cases." Consumer Watchdog Director John Simpson, said, "The U.S. Federal Trade Commission or Department of Justice should also act to end Google's monopolistic abuses, instead of letting the Europeans be the only cop on the antitrust beat." Yelp SVP Public Policy Luther Lowe, said, "The European Commission's ruling of additional illegal conduct by Google on smartphones is another important step in restoring competition, innovation and consumer welfare in the digital economy; the EU must ensure complete compliance from a recalcitrant Google and the U.S. must take action to provide American consumers with similar protections."
Elevation Partners' Roger McNamee, said, Commissioner Vestager's ruling today not only enhances competition and investment opportunities in Europe, but it will have a cascading effect into U.S. markets, where antitrust enforcers have so far failed to take meaningful action." Privacy startup Disconnect CEO Casey Oppenheim, said, "Other players in the digital ecosystem may finally be able to fairly compete with Google, giving meaningful choice to consumers."
The European Commission took issues with the following practices: In particular, Google:
1. has required manufacturers to pre-install the Google Search app and browser app (Chrome), as a condition for licensing Google's app store (the Play Store);
2. made payments to certain large manufacturers and mobile network operators on condition that they exclusively pre-installed the Google Search app on their devices;
and 3. has prevented manufacturers wishing to pre-install Google apps from selling even a single smart mobile device running on alternative versions of Android that were not approved by Google (so-called "Android forks"). Update: Google has announced that it would be appealing against the record fine. In a statement, the company said, "Android has created more choice for everyone, not less. A vibrant ecosystem, rapid innovation and lower prices are classic hallmarks of robust competition. We will appeal the Commission's decision."
Update 2: In a blog post, Sundar Pichai, CEO of Google, said, the European Commission's decision ignores and misses several facts. He wrote: Today, the European Commission issued a competition decision against Android, and its business model. The decision ignores the fact that Android phones compete with iOS phones, something that 89 percent of respondents to the Commission's own market survey confirmed. It also misses just how much choice Android provides to thousands of phone makers and mobile network operators who build and sell Android devices; to millions of app developers around the world who have built their businesses with Android; and billions of consumers who can now afford and use cutting-edge Android smartphones. Today, because of Android, there are more than 24,000 devices, at every price point, from more than 1,300 different brands, including Dutch, Finnish, French, German, Hungarian, Italian, Latvian, Polish, Romanian, Spanish and Swedish phone makers.
[...] The free distribution of the Android platform, and of Google's suite of applications, is not only efficient for phone makers and operators -- it's of huge benefit for developers and consumers. If phone makers and mobile network operators couldn't include our apps on their wide range of devices, it would upset the balance of the Android ecosystem. So far, the Android business model has meant that we haven't had to charge phone makers for our technology, or depend on a tightly controlled distribution model. [...] Rapid innovation, wide choice, and falling prices are classic hallmarks of robust competition and Android has enabled all of them. Today's decision rejects the business model that supports Android, which has created more choice for everyone, not less. We intend to appeal. Update 3: The French government said on Wednesday that it welcomes the record fine imposed on Google by European Union regulators, with a government spokesman describing it as an "excellent decision."
A number of companies, and startups that compete with Google have weighed in on the development. Open Markets Institute Executive Director Barry Lynn, said, "We hope U.S. enforcers of competition law will learn from and follow this example in both of these cases." Consumer Watchdog Director John Simpson, said, "The U.S. Federal Trade Commission or Department of Justice should also act to end Google's monopolistic abuses, instead of letting the Europeans be the only cop on the antitrust beat." Yelp SVP Public Policy Luther Lowe, said, "The European Commission's ruling of additional illegal conduct by Google on smartphones is another important step in restoring competition, innovation and consumer welfare in the digital economy; the EU must ensure complete compliance from a recalcitrant Google and the U.S. must take action to provide American consumers with similar protections."
Elevation Partners' Roger McNamee, said, Commissioner Vestager's ruling today not only enhances competition and investment opportunities in Europe, but it will have a cascading effect into U.S. markets, where antitrust enforcers have so far failed to take meaningful action." Privacy startup Disconnect CEO Casey Oppenheim, said, "Other players in the digital ecosystem may finally be able to fairly compete with Google, giving meaningful choice to consumers."
Yes - people misunderstanding what the EU is and what it is doing.
Like you seem to be doing.
Perhaps you didn't manage to read even the summary? The $5 billion is just the start; [...] end the illegal conduct within 90 days or face additional penalties of up to 5 percent of parent Alphabetâ(TM)s average daily worldwide turnover. Note that that's turnover, not profit, and moreover it's worldwide turnover, not EU turnover. Even Google would feel that.
It is simple. Google has a near monopoly on smart phone OS and search. Apple does not. iOS has a world wide share of like 20%.
So, yes, you can use Android, but not the Google PlayStore without also installing all of Google's mandatory apps and services and make them defaults. Therein lies the problem. Google is leveraging its app store to force you to use Chrome and its search functions. This is what the EU has issue with, and a good thing too or we'd all be using Internet Explorer now.
It's kinda hard to establish a new service, even a better one, if there is already one so entrenched and fortified that it's near impossible to generate the user base to make it viable. In other words, to see why your diatribe fails, replace "Google" with "Comcast".
We used to have a Bill of Rights. Now, with the rights gone, all we have left is the bill.
No, this is a way to force American companies who do business in EU to follow EU law. Unlike USA, where companies get a slap on the wrist for any wrongdoings and happily continue breaking the law, EU can actually apply leverage that works.
They don't have to pay, and they don't have to comply. They can just pack up and leave the EU market forever.
I've always felt it unethical to use the products of a company that makes money from advertising
The company that owns Slashdot makes money from advertising. Why are you using Slashdot?
Unfortunately for your principle, all of the news outlets linked by the summary are funded by advertising, as are all search engines you might use to find information about the article, and nearly all blogs you might read about it on. For that matter, nearly all browsers you might use to read it with are primarily ad-funded, including Firefox.
Why does the advertising model dominate in tech? For the same reason it's been the dominant funding mechanism for TV, radio and newspapers, for centuries: because it is by far the lowest-friction way to monetize the attention of a mass audience. And, of course, monetization is necessary because people need to eat. Perhaps we'll move to a post-scarcity economy which decouples work from survival and then you'll be able to find products that are created without need for compensation. Until then, advertising provides a way for people to make a living by producing stuff that's free for everyone, and that's a good thing.
While you're certainly welcome to avoid any company or products you like, I think your quest to avoid advertising-supported products is both doomed to failure, and fundamentally dumb.
So why isn't the response "fix these abusive practices, or be denied access to our market" rather than "give us a bunch of money".
1) It's a lot harder to justify a ban than a fine.
2) A fine doesn't put people out of work. In fact, government spending the money may employ people.
It's actually better for everyone, because the fines will induce Google to change their behavior (since they threaten additional fines, here) without causing people to lose their jobs.
"You're right," Fisheye says. "I should have set it on 'whip' or 'chop.'"
Google aren't merely offering their services, they are attaching exactly the same strings that Microsoft used to attach. Microsoft used to say: if you want to ship Windows, you may only ship Windows on all of the PCs you sell. If you ship one with OS/2 or Linux on, then the deal is off.
Google are doing the same thing. If you want to ship phones with Android and Google Play (which is increasingly necessary for many apps to just work), then *all* your phones must ship with this, and none with a competitive operating system or environment.
This is the monopoly abuse they are being punished for. They are not being punished for making good apps, they are being punished for using their dominant position (which on the lower end is 100% dominance) to prevent competition from even getting going.
Oolite: Elite-like game. For Mac, Linux and Windows