The latest in a string of run-ins with the European Union has Google in hot water over allegations of anticompetitive behavior. A report published in the Financial Times says that Google will be investigated for illegal price-setting regarding its Android operating system. EU regulators say that Google may have been offering Android licensing to mobile device manufacturers below cost as an incentive for them to outfit their products with its operating system, rather than the competitions’ offerings. But ZDNet reports that the more serious allegation is that Google pressed its partners to delay or cancel the release of products that used rival operating systems.
The lower price could have persuaded some manufacturers to choose Google’s operating system over alternatives produced by other competitors, including Microsoft and Nokia, effectively working to help the operating system maintain a large share of the mobile device market. In fact, it was complaints filed by both Microsoft and Nokia that prompted the investigation.
A Matter of Defining Costs vs. Revenues
In addition to the price-setting inquiry, antitrust investigators will look into whether Google forced device manufacturers to pre-install Google-owned apps on various devices while giving those apps prominent screen placement. Competitors have complained that Android has been used to push certain revenue-generating services for Google.
At this point, the probe is informal, and there’s no guarantee that any charges will result. But marketers should bear in mind that this is only the most recent of several points of conflict between Google and the European Union, which has dealt with antitrust and privacy complaints against the company for a long time.
With Google’s operating system currently claiming about 70 percent of mobile device market share, such complaints are to be expected. If the company does get into trouble, it could serve to open the door for lesser competitors to increase their share of the mobile market. Google could also be poised for some hefty fines of up to 10 percent of its global annual turnover. The penalty would apply to every year in which Google is found to have been violating EU antitrust rules.
The company has avoided hefty fines from the EU in the past, but this latest case might prove more difficult to evade.
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