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On 18th of July 2018, the European Commission ended the investigation opened in 2015 on Google’s anti-competitive behaviour regarding its Android mobile operating system and apps with a decision to impose a record-breaking fine of €4.34billion. The EC decision found that Google had abused its dominant position in the general internet search market by imposing illegal restrictions on android device manufacturers and mobile network operators.

Android is an open-source operating mobile system which Google licenses free-of-charge. Currently around 80% of European smartphones and three-quarters of mobile devices world-wide run on the Android system.

The EC has put forward claims that Google required manufacturers to pre-install the Google Search app and the browser Chrome, as a condition for licensing the Google’s app store, the Play Store. Allegedly, Google also prevented manufacturers wishing to pre-install Google apps from selling devices running alternative versions of Android not approved by Google. Finally, the EC claims that Google made some payments to certain manufacturers on condition that they exclusively pre-installed the Google search app.

According to the EC, Google’s behaviour helped to reinforce Google´s muscle in the search engine market and disincentivised phone manufacturers to pre-install competing search engines. Supposedly, this pushed competitors out of the market for mobile browsers. The EC also argued that Google´s conduct hindered innovation and denied consumers the benefits of effective competition.

During the investigation, Google argued that the EC failed to take into consideration the existence of Apple´s iOS operating system, its main competitor. In addition, it pointed out that manufacturers are not obliged to pre-install any Google applications and  are offered a set of applications that, in any event, can be erased by customers at all time.

Google also stressed that, since its introduction in 2007, the Android operating system has extensively been used by manufacturers to make better and cheaper phones. Finally, Google underlined that pre-installed applications offer wide choice for users.

In addition to the fine, the decision orders Google to stop the illegal practices within 90 days. It is expected that Google´s free-to-license Android business model will change as a result.

In relation to this, the President of the Developers Alliance has recently argued in favour of the current mobile devices ecosystems in a letter to the EC. He expressed concerns that an EC decision against Google as the one announced today could increase costs for many manufacturers and reduce choices for consumers without increasing the size of the market.

Together with the 2017 fine imposed on Google in the online shopping case, today´s fine increases the total amount that Google must pay in Europe to €6.76 billion. Next to this, the European Commission started an investigation into Google AdSense in 2015 so this amount could even increase in the near future.

Google has already confirmed that is going to appeal the decision in front of European Courts.

 

Authors: Carolina Fernández, María López Ridruejo y Emilija Berzanskaite

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Autores:

Consejera

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Es consejera del Grupo de Competencia y Derecho de la UE en Madrid. Previamente, trabajó como responsable interno de los asuntos de competencia en el Grupo Telefónica y como Directora Legal adjunta de The Coca-Cola Company para España y Portugal. Está especializado en derecho europeo y de defensa de la competencia comunitario y español.

carolina.fernandez@cuatrecasas.com

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maria.lopezridruejo@cuatrecasas.com

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