The European competition commission is going to frame charge against Google for providing unfair priority to its own apps in supplementary software licensing deals. The deals have been made with mobile phone manufacturers for using its Android operating system.
Last year, Google has posted sales revenue of $11 billion (€9.73 billion) from ads running on Android phones featuring own apps. Android operating system has become dominant software for running majority of the global smart phones in recent years. Google may have to count penalty up to $7.4 billion or 10% of last year's revenue while committing for amending its business practices, reports Reuters.
The probe conducted by EU antitrust agency focuses on the exclusive contracts enabling cell phone manufacturers running Google developed apps. However, the contracts may not bundle a complete set of Google apps like Search, Maps, Gmail and Google Play Store on smart phones, according to a report published in The Globe And Mail quoting Margrethe Vestager, chief of the EU antitrust agency.
Android contains open source software allowing device makers to build and run their own software. Majority of the European phones use a standard package of software including Google apps which requires licensing from Google, informs Strategy Analytics, a technology market research firm.
The Alphabet subsidiary has denied allegations since it sends billions of clicks for free to the websites of news publishers. The search engine provider also claims working with publishers to support online journalism aiming a more sustainable ecosystem for news. Google specifically denies Android related charges since Android developers are allowed using its app with or without getting permission from Google. Consumers are righteous in choosing apps for their Android devices, reports The Wall Street Journal quoting a spokesperson for Google. Google has been expanding in many areas while attracting competitor complaints and government scrutiny. The Silicon Valley giant is under regulatory scrutiny in multiple sectors and in multiple countries, which may be the new normal, observes Paul Gallant, a regulatory analyst with Guggenheim Securities. EU regulators have reportedly received formal complaints from Google rivals for its control over Android to reduce competition. However, charges relating to Android may be easier to prove for EU since it is based on specific contracts capable of exhibiting the complained illegal behavior. Review of the contracts may also suggest remedies to free up the Google competitors.
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