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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."
Most of Google's cash is in Ireland. The repoman will simply force the bank to hand over the money.
Given that would wipe out Irelands position as european tech darling ireland probably wouldn't allow it or would procrastinate long enough for google to withdraw the funds.
I'm so tired of this anti-EU bullshit. You really need to find a new scapegoat for the failure of your local politicians.
In order for the EU to remove power from any national government, besaid national government would first have to agree with this or, second, there needs to be an unanimous vote by all member states to remove that power.
Any power that is currently not in the hands of national governments and can be overruled by directives is not in their hands because all governments of all member states previously voted to take away that power and give it to the EU to the mutual benefit of all member states. What's even worse about posts like yours is that the people who criticize the EU now for not being democratic enough are exactly the same people who in the past ensured that the EU has this structure, most notably the UK, whose main goal has always been to make the European Parliament as weak as possible, prevent a EU wide defence structure, not having a EU president, etc. The European Parliament is relatively powerless and commissioners appointed by the governments of member states (and voted for by European Parliament, which directly represents all EU citizens) have a relatively high amount of power because member countries wanted to make sure that the European Parliament has less to say than national parliaments.
And what's bizarre about complaining about the monopoly of search engines so late? By design, the commissions mostly become active in such matters after the complaints have reached national level and the whole process takes time.
In a nutshell, quit those silly complaints about the EU. Rather complain about the local politicians like Margaret Thatcher who designed it that way and opt for local politicians that want to give the EU Parliament more power. Remember, the EU parliament is directly voted for by the citizens of the member states.
France uses the winning to restart its Thomson TO 2019 production line. AZERTY keyboard with a new light pen.
Domestic spying is now "Benign Information Gathering"
This is not a question of technology, and the EU has a long history of protecting consumers. The last sentence shows you don't understand how the EU works, which makes your desire to criticise it baffling.
Google are where they are because they've built a solid reputation with consumers, not because they did something shady.
... except when they did, and eventually the case was raised within EU, and carefully examined, and yes, found to be shady, and a fine was decided on.
It's not against the law to run a good business and end up in a monopoly situation. But monopolies are generally not a good thing because they come with a special set of powers. So we have a special set of rules governing them. If you run a monopoly and exploit certain of these powers, then you may end up facing the consequences.
There's nothing new in this.
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.
Here's a clearer summary of what Google have been up to as reported by The Guardian.
EU Competition commissioner Margrethe Vestager says:
Google required manufacturers to pre-install the Google search and browser apps on Android phones, otherwise they wouldnâ(TM)t be allowed to use Google Play (its app service).
Google paid manufacturers and network operators to make sure that only the Google search app was installed on devices.
Google has restricted the development of competing mobile phone operating systems, which could have provided a platform for rival search engines.
Google has used Android as a vehicle to cement its dominance as a search engine.
These practices have denied rivals a chance to innovate and to compete on the merits.
They have denied European consumers the benefit of effective competition in the very important mobile sphere.
And this is illegal under EU antitrust rules.
Todayâ(TM)s ruling states:
Google has prevented device manufacturers from using any alternative version of Android that was not approved by Google (Android forks).
In order to be able to pre-install on their devices Googleâ(TM)s proprietary apps, including the Play Store and Google Search, manufacturers had to commit not to develop or sell even a single device running on an Android fork.
The Commission found that this conduct was abusive as of 2011, which is the date Google became dominant in the market for app stores for the Android mobile operating system.
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.
No, you can't. The spyware they put in isn't optional -- because it's not opt-in on the device, it's done via the services you use with Android. Also, you seem to be missing the point where the previous CEO of Google said his job "was to get right up to the creepy line, but not to cross it". http://www.businessinsider.com/eric-schmidt-googles-policy-is-to-get-right-up-to-the-creepy-line-and-not-cross-it-2010-10?IR=T
Apple isn't a saint, but Google is a piece of shit.
Sucks to be on the receiving end, no?
We used to have a Bill of Rights. Now, with the rights gone, all we have left is the bill.
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.
Defaults always win. 99% of the users do not install anything else on their phones. Besides try to uninstall the a random google app. If its in the system part of the phone you do not have a chance, unless you root the phone, which is 0.0001% of the users. This was the same problem with Microsoft and Internet Explorer. Google wouldn't exists without that previous decision.
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.
How many years did the US government take again to 'punish' MS for its misuse of its monopoly? 15? And it was a punishment that benefited MS in the long run! No wonder the monkey danced.
-- Cheers!
Your democratically elected government at the time made this choice, as was the choice of your democratically elected government whether to leave the EU and/or whether there should have been a referendum about it or not.
In your case the choice to join the Maastricht Treaty without a referendum was made by the conservative government of Sir John Major, which also negotiated important aspects of the treaty for the UK.
You know, it's not as if this information is kind of secret, you can look it up yourself next time.
The issue is not having the best, most popular product. It's forced bundling and cross-promotion.
With Android you need to agree to make Google the default and only search engine on the phone if you want the Play Store. Since consumers want the play store manufacturers can't supply any other search engines. Amazon tried its own app store but outside its own devices it mostly failed, as did most Amazon devices except their cheap tablets.
Chinese manufacturers can't ship Play or Google search anyway because they are blocked in China. Their international models have them though.
const int one = 65536; (Silvermoon, Texture.cs)
SJW, n: "Someone I don't like, and by the way I'm a fuckwit" - AC
I've been developing Android devices for many years and can tell you from first hand experience, Google has been getting away with a lot of anti-competitive practices and favoritism. Unless you are one of the top 5 brands in the world, they simply will not talk to you. No matter how hard you try or show willingness to pay, they will not "certify" Android devices from anyone but their close circle of suppliers, with whom they have very complex agreements. This is why a very high percentage of devices are sold without the Play store pre-installed. It also blocks other things from working, such as full support for the DRM used by Netflix, HBO, and many other VOD apps. You are given the freedom of choice to choose any brand, as long as it is the ones they allow you to choose from.
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 what happens if google just refuses to pay?
Then the EU will sortie its massive military forces to...
Oops - those forces that happen to be largely American.
A 20% market share of 100% Apple manufactured phones vs 80% market share for Android spread across dozens of manufacturers, none of which can claim 20% of the market or anything close to Apple's profits. You're comparing Apples to Oreos and coming up with D'oh.
Apple is the sole provider of the operating system for Apple phones. Apple does not allow other people to manufacture iPhones, does not allow other App stores, does not allow other web browsers (They still have to use Safari's engine, so they're mostly skins). Apple conspired with book publishers to fix prices on ebooks. Apple is a monopoly, by every definition, and abuses it.
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
What cheek, to actually want to enforce a law. Against a corporation, no less.
We used to have a Bill of Rights. Now, with the rights gone, all we have left is the bill.
If only the problem had anything to do with Hungary, Poland or another East European country...
One EU leader took action that created the problem for all and then asks to stand united? A leader of the richest EU country no less...
Not only East Europe does not have the money to accomodate economy emigrants but they don't want to stay in our country cause noone gets money for not working, including the natives.
And finally, east Europe is much wiser when it comes to Marxist bullshit masquerading as 'compassion' and 'equity'.
We remember the Gulags my friend...and the 'class enemy' and the '5 minutes of hate' and so much more...
Western political discourse in the last decade is taken from 'the manual of the agitprop party worker'. It's scary as hell!
Of course, if what you want is to eliminate tracking from phones in the EU, you could pass laws that, y'know, eliminate tracking. I imagine Google - and others - could still make bundles without tracking individual users, but if they can make more with tracking, they're gonna do it.
Meanwhile, nobody seemed to care about Google search and gmail being included in Android phones till they got too popular - and presumably, competitors started bribing politicians. That doesn't mean the behavior shouldn't be stopped, but imposing a huge fine over past behavior that only crossed the line at some undetermined point in the past seems draconian. If you can't act soon enough to prevent the harm, you can't (well, I guess maybe you can), punish past legal behavior for retroactively becoming illegal. That's not quite fair.
When they went after Microsoft, they first got a consent decree ("we won't do that any more") and then fined them for violating it. Was such an agreement made - and violated - in Google's case with Android?
And in Microsoft's case, the remedy was to force them to allow a choice of browsers. Android already does that. And a choice of launchers (with or without the Google search widget). What's missing here? Only the option for OEM's to accept payments from Microsoft to build phones with Bing instead of Google?
Posted from my Android phone. Oh, I can change this? There, that's better...