WASHINGTON D.C. — Today, the European Commission imposed an unprecedented €4.34 billion ($5.06 billion) fine against Google. In an hour-long press conference, European Commissioner for Competition Margrethe Vestager charged Google with three antitrust violations involving its the open-source Android mobile operating system: (1) pre-installing the Google Search and Chrome browser apps as conditions of licensing Google’s app store (the Play Store); (2) paying certain device manufacturers (OEMs) and mobile carriers for exclusively pre-installed the Google Search app; and (3) requiring that, if OEMs pre-install Google Apps, they cannot sell any mobile devices running “forked” versions of Android. Google must cease this “illegal conduct” within 90 days, or face additional fines of 5% of its daily worldwide turnover. Google has said it will appeal the ruling.
“This may go down in history as the stupidest antitrust suit of all time,” said Berin Szóka, President of TechFreedom. “The EC’s last antitrust suit against Google turned on the preposterous claim that Google’s product search didn’t compete with Amazon, the obvious market leader. Here, again, the EC has defined the market to make Google seem like a monopoly — by excluding Apple. That Google and Apple compete directly would be obvious to any teenager in even the most remote village in Transylvania. And while they might lust after the iPhone as their first smartphone, they’ll probably start with an Android, because Google’s open source model has enabled a fiercely competitive ecosystem of device manufacturers offering superb, if less sexy, products at a fraction of the cost of Apple’s ultra-premium product. Killing the business model that allows Google to keep Android open source and competitive with iOS won’t help anyone — except maybe Apple.”
“All three of Google’s supposedly anti-competitive practices are, in fact, vital to sustaining Android as a competitive alternative to Apple,” continued Szóka. “None has the anti-competitive effects the EC claims. If anything, the biggest problem with the Android ecosystem is that it is too fragmented. Encouraging fragmentation will make users more vulnerable to security threats and degrade their experience. Yes, Google requires OEMs and carriers to pre-install its apps — but unlike iOS or Windows phone, they don’t clog the home screen. Users need see only a single folder — leaving room for twenty-four other apps or folders that can be pre-installed on the home screen. Anyone who wants their own apps pre-installed can negotiate for it — not with Google but with the OEMs and carriers. Moreover, Android makes it uniquely easy to install new apps, or even an entirely separate app store, such as Amazon’s. It’s easy to change the default app for certain kinds of content — something that isn’t even possible for key parts of iOS. Of course Google requires pre-installation of the search app. Search is what funds Android. Take that away and Google will have to start charging — cost that will be passed on to the consumer in the form of higher phone prices. That, in turn, will make Android less competitive with Apple.”
“Americans have been learning the hard way what economic populism looks like, and how badly it can backfire,” concluded Szóka. “For all her technocratic polish and lofty rhetoric, Vestager is channeling the same populist whirlwind driving President Trump’s own protectionist demagoguery. Where Trump plays on middle America’s deep anxieties about globalization and technological change, Vestager is channeling Europe’s resentment at its best and brightest tech innovators moving to San Francisco. Both conjure fantasies about a renaissance in the heartland if only the protectionist wall were high enough, if only they were ‘tough’ enough. Both are more concerned with scoring headlines than with the actual effects of their policies. What the EC did today will harm Internet users all over the world, but especially the world’s poorest. If it succeeds in promoting any kind of competition, that’s likely to be from the Trump DOJ or FTC trying to outdo Brussels in feel-good, populist trust-busting.”
- Our statement “Its Official: EU Antitrust Law Isn’t about Consumer Welfare”
- Our statement “EU v Google: Regulators Still Fighting the Last War”
- Our statement “Europe Doesn’t Know What to Do with Google Antitrust “Concerns””
- Tech Policy Podcast #83: “Europe’s War on Google”
- Our statement on the start of the EU’s lawsuit against Google in 2015
TechFreedom is a non-profit, non-partisan technology policy think tank. We work to chart a path forward for policymakers towards a bright future where technology enhances freedom, and freedom enhances technology.