Moment of truth for Google as record EU antitrust fine looms
Moment of truth for Google as record EU antitrust fine
looms
By Foo Yun Chee Reuters July 16, 2018
BRUSSELS (Reuters) - Google is set to face a
record-busting EU antitrust fine this week over its Android mobile operating
system but rivals hoping that an order to halt unfair business practices will
help them may be disappointed.
The European Commission's decision, delayed by a week by
U.S. President Donald Trump's visit to a NATO summit in Brussels last week, is
expected on Wednesday.
It comes just over a year after the Commission slapped a
landmark 2.4-billion-euro ($2.8 billion) penalty on Google, a unit of Alphabet
Inc, for favouring its shopping service over those of competitors.
The EU penalty is likely to exceed the 2017 fine because
of the broader scope of the Android case, sources familiar with the matter have
told Reuters.
The EU sanction comes in the midst of a trade conflict
between the United States and the EU, which has hit back against U.S. tariffs
on European steel and aluminium by targeting $3.2 billion in American exports
with higher duties.
European Commission President Jean-Claude Juncker will
meet Trump in Washington D.C. on the trade issue next week.
The Android decision is the most important of a trio of
antitrust cases against Google. With the company able to make its ads show up
in more smartphone apps than any other tech rival, Google's app network has
quietly become a huge growth engine.
The company's high payouts to app developers, coupled
with its entrenched relationship with millions of advertisers, has turned
Google into the main revenue source for many apps. Its Play Store accounts for
more than 90 percent of apps downloaded on Android devices in Europe.
Its popularity in turn could mean an uphill battle for EU
antitrust regulators seeking to level the playing field for Google's rivals by
ensuring that users can download from competing app stores and that smartphone
makers are free to choose pre-installed apps.
Regulators say Google has tilted the field in its favour
by forcing smartphone makers to pre-install Google Search together with its
Play Store and Chrome browser, sign agreements not to sell devices on rival
Android systems and also pay smartphone makers to only pre-install Google
Search on devices.
Google has denied the charges, saying that bundling
search with its Google Play allows it to offer the entire package for free, and
that smartphone makers and users have a wide choice.
Regulatory action is probably too late because of
Google's entrenched position, said analyst Richard Windsor at research company
Radio Free Mobile.
"Users in the EU are now completely accustomed to
using Google services and have come to prefer them," he said.
"Hence, I think separating Google Play from the rest
of Google’s Digital Life services would have very little impact as users would
simply download and install them from the store," Windsor said.
The Android case was triggered by a 2013 complaint by lobbying
group FairSearch whose members at the time included competitors such as Oracle,
Nokia and Microsoft.
($1 = 0.8538 euros) (Reporting by Foo Yun Chee; Editing
by Adrian Croft)
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