In the European Union’s ongoing effort to ensure fair play in the mobile sector, antitrust officials notified Google that it is in breach of EU rules and taking advantage of significant market share around the Android operating system.
European Commissioner for Competition Margathe Vestager said the company “has abused its dominant position. Google’s behavior has harmed consumers by restricting innovation in the wider mobile space.”
The European Commission on Wednesday articulated its position in a “statement of objections” sent to Google and parent company Alphabet. From an attendant public statement:
- Google’s market shares in the EEA [European Economic Area] for licensable mobile operating systems exceed 90%. Android is used on virtually all smartphones and tablets in the lower price range, which are bought by the majority of customers.
- There are a number of barriers to entry that protect Google’s position, including so-called network effects (that is, the more consumers adopt an operating system, the more developers write apps for that system).
- Finally, Android users who wish to switch to other operating systems would face significant switching costs, such as losing their apps, data and contacts.
- The Play Store accounts for more than 90% of apps downloaded on Android devices in the EEA.
- Manufacturers find it commercially important to pre-install the Play Store on their devices. It is pre-installed on the large majority of Android devices in the EEA and is not available for download by end users. Also, end users cannot download other app stores from the Play Store.
- Android users would generally not switch to app stores for other operating systems as they would have to purchase a new device and would face significant switching costs.
Distilled, the problem, from the regulator’s perspective, is that Google asks manufacturers wishing to use its Android app store to also pre-install Google search, browser and other applications, which inherently limits consumer choice.
“By imposing the above-mentioned conditions on manufacturers, Google limits manufacturers’ freedom to choose the most appropriate apps to pre-install. This strategy appears to protect and strengthen Google’s dominant position in general Internet search, and adversely affect competition in the market for mobile browsers. The commission has evidence that smartphone manufacturers would wish to source at least some of the apps that they pre-install from other parties than Google.”
