Donald Trump, the President of the US and all-around blabbermouth, has felt the need to weigh in on the European Union’s decision to fine Google a record £3.8 billion for antitrust practices relating to Android‘s dominance in the mobile marketplace.
The US President’s told his Twitter followers “I told you so!” only days after branding the EU one of his biggest “foes” for its trade policies in an interview with CBS News, and accused the EU of taking advantage of the US – before hinting at retribution.
Adding to his tweet Trump said: “The European Union just slapped a Five Billion Dollar fine on one of our great companies, Google. They truly have taken advantage of the U.S., but not for long! [sic]”
Google Android EU antitrust fine
The Google fine from the EU was the result of an ongoing case of antitrust investigations into the company. The EU’s competition commissioner Margrethe Vestager believes that Google is abusing its power by forcing smartphone manufacturers to adopt Android and its associated apps as default. Device manufacturers using Android have to use Google’s search and web browsing apps by default and have no say in the installation of a slew of other Google-made apps like Maps, YouTube and more.
Vestager has been gunning for Google since 2016, over the company’s claims that Android is open and flexible for all. The competition commissioner believes that by pre-installing Android phones with Google services it’s not, in fact, providing the consumer choice it claims to advocate.
The fine, which is to be announced around midday today, Wednesday 18 July, signifies the end of Google’s battle with the EU over a multitude of issues. It was initially believed that the final fine against Google could have been a humungous £8.17 billion – 10% of Google parent company Alphabet’s global turnover. As the FT stated at the time, it’s unlikely for the EU to go for the full fine amount – instanced by last year’s 2.4 billion-euro (£2.1 billion) sum due to an issue with how it displayed and favoured search results for Shopping searches.
Google and Alphabet have made no comment on the fines but, according to a Bloomberg source that wished to remain unnamed, Google CEO Sundar Pichai spoke with Vestager late on Tuesday to be informed of the impending fine.
As Android is used in more than 80% of smartphones on the market right now, the ruling could have a big impact on Google’s business model of Android providing a gateway into its services for people. It’s possible that such a ruling could change how Google operates in the EU, which may not actually be a great thing for consumers.
Google has hit back in the past about the EU’s claims around Android’s setup in Europe. In a blog post from 2016 Kent Walker, Google’s general counsel, explained that the company believes “that our business model keeps manufacturers’ costs low and their flexibility high while giving consumers unprecedented control of their mobile devices.”
While Walker’s statements may well be true – it’s easy to not use Google Chrome, Google Search or any Google services on an Android phone if you don’t want to – the European Commission disagrees. In fact, because Google holds such dominance with Android, and it makes manufacturers install Google services as default, manufacturers don’t have much of a choice but to use Google – restricting what they can offer up.
Apples and oranges
If you’re wondering why Google is being targeted for Android, but Apple isn’t in hot water for iOS, it turns out it’s because the EU doesn’t see iOS and Android as the same thing. Android is licensed out, iOS is only available on Apple’s devices, and thus doesn’t fall under the EC’s jurisdiction.
“The commission’s case is based on the idea that Android doesn’t compete with Apple’s iOS,” said Walker. “We don’t see it that way. We don’t think Apple does either. Or phone makers. Or developers. Or users.”
Because Google operates an open model that allows anyone to download and use Android, it allows users to break away from the likes of iOS, Blackberry’s RIM and other mobile operating systems that run in a closed environment. It’s arguable that many consumers use Android devices because they want to be using Google services – likely because they’re already using them elsewhere and it makes more sense to use them everywhere than juggle multiple services for one task across various platforms. By restricting access to these services, the EC runs the risk of actually making things harder for consumers, rather than easier.
Google argues that the only reason it places controls on what developers can do is to ensure that Android actually works smoothly on a wide variety of phones and tablets. If a user doesn’t want to be using Google’s services, it’s very easy to download an alternative.
The European Commission’s stance against Google Shopping could easily be argued as being within consumers’ interests, but this latest case against the company nevertheless smacks of the EC throwing its weight around. According to Politico, its sources report that the EC will reach a decision next month.
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