Google risks a $7.4 billion fine if the antitrust allegations are upheld.
In a blogpost yesterday, Google rebuffed antitrust charges by the European Union accusing the search giant of monopolistic practices with its Android operating system.
The EU said that by requiring hardware manufacturers to pre-install Google apps under “restrictive licensing practices,” Google was closing the doors to rival search engines and browsers trying to enter the market.
Google, however, says Android is an open source platform that has helped to significantly lower costs for device manufacturers that use the operating system for free — albeit after agreeing to Google’s terms.
Google also points to the fact that Apple pre-installs Apple apps on the iPhone, as does Windows. And that Android doesn’t block device manufacturers from pre-installing competing services next to Google apps, nor does it block users from deleting Google apps.
But those who have complained to the EU about Google’s restrictive contracts see it differently. One of the industry organizations that lodged a complaint, Fairsearch — which represents competitors Microsoft, Nokia and Oracle — says Google locks phone manufacturers into a web of contracts that effectively force them to install Google apps.
Apps, after all, are how phones collect user data, and that’s how Google sells ads.
Google is in the throes of two other antitrust complaints with the EU. One involves accusations that the company favors its own search results in its online shopping service over its rivals. The other alleges the online search giant abuses its market power by offering its online advertising on third-party websites that use Google’s search engine.
If the European Union concludes Google is in violation of its antitrust rules, it could fine the company up to $7.5 billion, or 10 percent of its annual revenue.
The case has similarities to when the European Commission accused Microsoft of antitrust abuses. Because Internet Explorer was bundled with Windows in 2009, regulators claimed Internet Explorer unfairly held a disproportionate share of the browser market in Europe. In the end, Microsoft paid $3.4 billion in fines.