EU Android lawsuit: will Google learn its lesson or continue being a bad “student”?

As interested third party in the EU’s antitrust case against Google Android, the European DIGITAL SME alliance hosts an article written by Thomas Vinje, partner and chairman of Clifford Chance’s Global Antitrust Group and counsel to FairSearch, an association of tech companies that is the main complainant in the Android case.

 Google is no stranger when it comes to legal disputes with the European Union, however this time takes the cake. Back In 2016, the European Union begun an official investigation against Google accusing the company for abusing its pre-eminent position, hindering the development of rival mobile operating ecosystems. After months of speculation, finally on July 18, 2018 the Commission announced its long awaited Decision on the case, where Google was imposed a record fine of 4.3 billion euro for having abused its dominant market position by:

  • Pre-installing the Google Search app and browser app (Chrome), as a condition for licensing Google’s Play store;
  • Making payments to manufacturers and mobile network operators on the condition that they exclusively pre-install the Google Search app on their devices;
  • Preventing manufacturers wishing to pre-install Google apps from selling mobile device running on alternative versions of Android, so-called “Android forks”.

The Decision set a historic precedent for the rights of Europe’s digital companies that call for fair competition in markets dominated by US tech giants, as it was greeted by many in hopes that it would ensure that app developers and consumers would have the ultimate say on what they deem to be – as opposed to what Google deems to be – the best Android offering.  Indeed, it was designed to allow rival search and browser apps to compete with Google for pre-installation on Android devices, resulting in more choice for consumers.

The Decision requires Google to put an end to its abusive practices by implementing a so-called remedy within 90 days of notification of the Decision (i.e., 29 October 2018).  It is up to Google to come up with a compliant solution, which cannot lead to the same or equivalent object or effect as the abusive behaviour identified in the Decision.

Once the remedy is implemented, the European Commission will monitor it to identify whether it is compliant with the Decision.  Failure to comply with the remedy may result in significant fines, in addition to the unprecedented fine that was already imposed on Google when the Decision was issued back in July.

I am however sceptical as to whether Google’s proposed implementation remedy will actually put an end to Google’s anticompetitive manners.

  1. By limiting the scope of the remedies to Europe, Google is doing the bare minimum to comply, rather than fully committing to change its abusive behaviour.
  2. While Google has promised to un-tie the Google Play store with the Chrome browser and the Search app, manufacturers will still have to pre-install the remainder of Google’s collection of proprietary apps, such as Google maps, YouTube, and Google+, to be able to offer the Play Store on their devices.  By tying the remainder of these apps to the Play store, Google is still leveraging the Play store’s dominance into the market for those other apps.  This directly goes against the aim of the decision,e., to ensure that consumers are exposed to a wider variety of apps which compete with Google’s.  In addition, the remedy is unlikely to put an end to Google’s access to data generated by using apps.
  3. Charging for the apps gives Google an excuse to increase its profits, given that Google’s anticompetitive behaviour has already taken hold to such an extent that they have become ubiquitous, and device manufacturers are effectively required to obtain them because they have become the defacto standard

Everything appeared very different when Google presented Android to the world back in 2007. What Google then presented as an open source product for everyone to develop on, turned out only to be a mask hiding Google’s unfair practices.

 The Decision taken in July is a bright example on how the EU defends competition for everyone, including its own companies, and that is exactly what it should keep doing.  While the global tech players, such as Google, Microsoft and Apple, have greatly contributed to shape the digital era with their innovations, our app developers, our companies, and our consumers are a dynamic force that constantly seek to disrupt markets with new technologies. They are key drivers of innovation; they deliver real societal and economic changes.

The European Commission has a rare opportunity to make actual difference for app developers and consumers, and therefore I would urge the Commission to carefully review Google’s implementation of the remedy, in particular taking into account the interest of European innovators and consumers.