EU competition chief set to charge Google with Android abuse: sources

Mon Apr 18, 2016 10:47am EDT
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By Foo Yun Chee and Eric Auchard

AMSTERDAM/FRANKFURT (Reuters) - The European competition commission is gearing up to charge Google with giving unfair prominence to its own apps like search and maps in supplementary software licensing deals it strikes with mobile phone makers running its Android operating system, four sources familiar with the process said on Monday.

Google generated an estimated $11 billion (9.73 billion euros) last year from sales of ads running on Android phones featuring Google apps. Android has become the dominant software in recent years, running most of the world's smartphones.

If the EU were to find Google guilty of market abuse it could lead to a fine of up to $7.4 billion or 10 percent of 2015 revenue, while forcing it to change its business practices.

EU antitrust chief Margrethe Vestager said on Monday her agency's probe centers on the use of exclusive contracts which enable phone firms to run Google's own apps and not necessarily on demands they bundle in a complete set of Google apps such as Search, Maps and Gmail and its Google Play app store on phones.

For while Android is open source software that gives device makers the freedom to build and run their own software, the vast majority of European phones run a standard package of software and Google apps that must be licensed from Google, according to data from Strategy Analytics, a technology market research firm.

"Our concern is that by requiring phone makers and operators to pre-load a set of Google apps, rather than letting them decide for themselves which apps to load, Google might have cut off one of the main ways that new apps can reach customers," Vestager said at a regulatory conference in Amsterdam.

"We are looking into the question of tying, but tying in itself is not necessarily a problem," she added in response to a question about whether the EU had narrowed its list of concerns over Android.

"It depends on how it's made but that is part of our investigation, which as I said, is not done yet," she said, giving no further hints on the timing of when her agency might expand its charge sheet against Alphabet Inc’s (GOOGL.O: Quote) Google.   Continued...

European Competition Commissioner Margrethe Vestager addresses a news conference in Brussels, Belgium, January 11, 2016. REUTERS/Francois Lenoir  -