In a major development on the copyright front, the European Union has sent its formal antitrust charge-sheet to Google. The main focus of the charges is that Google prioritizes its own services on Android devices and pre-installs its search and other services as default which prevents other competing companies from competing against Android mobile operating system. Margrethe Vestager, the European Commissioner for competition said in a press conference:
“Our preliminary view is that Google has abused its dominant position. Google’s licensing practices mean that tablet and smartphone manufacturers [are] not free to choose which search engines and which browsers to install on their devices. This hampers competing browser and search providers.”
This is another addition to other antitrust investigations that EU has started against Google. Another investigation is already under way on charge that Google unfairly prioritized its own shopping services ahead of the better search results.
If found guilty, the EU can impose a fine of upto 10 percent of the global revenue of Google which means the fine could reach up to $14 billion. Google can then appeal the decision before the European Court of Justice or may opt for a settlement.
Today’s charges are critical because these strike at the very root of Google’s mobile business model which involves the company offering free Android operating system to manufacturers in exchange for pre-installation of its apps and services on smartphones. It is estimated the more than half of Google’s advertising revenue (roughly $43 billion) comes from mobile ads.
Google has responded to the charge-sheet in a blog post with claims that its business model facilitates low costs for manufacturers and offers high flexibility. The company also says that is licensing terms and agreements with the smartphone manufacturers are also voluntary. Google said:
“While Android is free for manufacturers to use, it’s costly to develop, improve, keep secure, and defend against patent suits. We provide Android for free, and offset our costs through the revenue we generate on our Google apps and services we distribute via Android.”
Google will have to respond to the charges in 3 months.