European Antitrust Commission Says Google's Android Limits Manufacturers Freedom

(RTTNews) - In a statement of objections, the European Commission said Google has breached European Union antitrust rules and abused its dominant position by imposing restrictions on Android device manufacturers and mobile network operators. The commission has also addressed to Alphabet Inc. (GOOGL).

The Commission's preliminary conclusion is that by imposing conditions on manufacturers, Google limits manufacturers' freedom to choose the most appropriate apps to pre-install and adversely affect competition in the market for mobile browsers. The Commission observed that Google is dominant in the markets for general internet search services, licensable smart mobile operating systems and app stores for the Android mobile operating system. It has noted that Google has market shares of 90 percent and above in most Member States.

Google's market shares in the EEA for licensable mobile operating systems exceed 90 percent. Android is used on virtually all smartphones and tablets in the lower price range, which are bought by the majority of customers, the Commission noted.

In the statement, the Commission said, Android users who wish to switch to other operating systems would face significant switching costs, such as losing their apps, data and contacts.

Manufacturers find it commercially important to pre-install the Play Store on their devices. It is pre-installed on the large majority of Android devices in the EEA and is not available for download by end users. Also, end users cannot download other app stores from the Play Store.

The Commission's investigation showed that Google obliges manufacturers, who wish to pre-install Google's app store for Android, Play Store, on their devices, to also pre-install Google Search, and set it as the default search provider on those devices. In addition, manufacturers who wish to pre-install Google's Play Store or Search, also have to pre-install Google's Chrome browser. The Commission observed that thereby, Google has ensured that Google Search and Google Chrome are pre-installed on the significant majority of devices sold in the EEA.

The Commission sought to ensure that manufacturers are free to choose which apps they pre-install on their devices.

In particular, if a manufacturer wishes to pre-install Google proprietary apps, including Google Play Store and Google Search, on any of its devices, Google requires it to enter into an "Anti-Fragmentation Agreement" that commits it not to sell devices running on Android forks.

The Commission has found evidence that Google's conduct prevented manufacturers from selling smart mobile devices based on a competing Android fork which had the potential of becoming a credible alternative to the Google Android operating system. Further, the Commission said, Google has granted significant financial incentives to some of the largest smartphone and tablet manufacturers as well as mobile network operators on condition that they exclusively pre-install Google Search on their devices.