Just weeks after Google reached a legally-binding agreement with the EU following a long-winded antitrust case, the company is now reported to be facing a new investigation by European authorities into allegations surrounding its Android smartphone operating system. Rivals of Google, including Microsoft, Nokia and FairSearch.org, argue that Google is licensing Android to phone manufacturers too cheaply, whilst making demands about the placement of its products and services.
The crux of the argument is that Google is basically using Android as nothing more than a vehicle to sell its own services, which gives it a greater opportunity to sell more advertising, according to the Financial Times. Currently, advertising is said to account for around 96% of Google’s revenues, which means that in reality just about every service and product it creates is intended to boost its advertising business, either by collecting more data that can be used for targeted ads, or by creating more opportunities to display said ads.
This isn’t a full blown investigation yet, but it might yet cause problems for Google. Previously, the search giant was forced to settle with the EC over allegations that it was abusing its position as the number one search engine in Europe – ultimately, Google agreed to clearly label its own products and services whenever these were displayed in its search results, and it’s now required to display results of competing firms whenever it sells paid search results. In addition, Google was also forced to stop insisting that customers of its AdSense platform refrain from using alternative ad programs on the same website.
According to the Financial Times, the European Commission is now investigating Microsoft’s and Nokia’s allegations about Android – if they’re discovered to be correct, it will then launch a full-blown investigation into the company. Not surprisingly, Google has already moved to counter these charges, stating that “Android is an open platform that fosters competition. Handset makers, carriers and consumers can decide how to use Android, including which applications they want to use.”
True enough, Android users are free to choose which applications they want to use and which ones they don’t, but in practice it doesn’t quite work like this. Google actually forces phone manufacturers to pre-install an entire suite of Google apps – otherwise, they won’t be allowed to install anything, not even the Google Play store. What this means is that other services, such as Bing search and Nokia Maps really don’t get a look in, as the vast majority of users automatically adopt Google’s products. Even worse, many of these Google apps cannot be uninstalled.
In return for this cooperation, Google gives Android away for free – it loses money on the software in other words, but these losses can be recouped through its advertising business, therefore creating an artificial barrier to entry that rival software such as Windows Phone and Blackberry cannot compete with.