The EU has fined Google a record 4.34 euros ($5.03 billion) for three practices that it considers illegal when it comes to how Google ensures that its ecosystem is the dominant ecosystem on Android. But I think the EU has completely missed the point.
The bundling of Google Play with the rest of the Google ecosystem is the main reason why Google has been so successful in getting its ecosystem into the hands of Android device users, and the EU appears to be ignorant of this critical factor. This is what the EU should have gone after.
Hence, I think this ruling is actually a great outcome for Google and demonstrates yet again that legislators have very little understanding of how these technology companies work and the critical issues at play. The fine itself is irrelevant, as it amounts to 43 days of operating cash flow (Q4 17) and 4% of the cash balance that Google has on hand.
The EU has identified three “illegal” activities and it has given Google 90 days to cease their practice or face further fines of 5% of daily turnover for every day that it is in non-compliance.
These practices are:
- Rival search: Google has effectively blocked rival search offerings from being installed on Android devices by paying handset makers and operators not to install rival offerings.
- No forks: Handset makers who have been using Google-approved Android have been prevented from making devices using other versions of Android. The failure of Amazon to get any handset makers to make devices based on its version of Android (Fire OS) is a good example of this. I have long believed that FireOS was a worthy competitor and at its peak, its app store was almost as good as Google Play.
- Rival browsers: Google has blocked other browsers from being preinstalled on Android devices by making payments to handset makers and mobile operators on the condition that the only browser pre-installed on their devices was Chrome.
Google will obviously appeal these decisions, and the battle is likely to go on for some considerable time. But even if Google loses, I think the EU has completely failed to impose an effective remedy. Even if Google stops paying handset makers and mobile operators not to preinstall rival search and browser apps, it will still be able to ensure that its browser and its search app are present on the device and set by default.
It is this setting by default that is so critical, as even if rival browsers and search apps are present, they are likely to go unnoticed. Furthermore, most users in developed markets are already so hopelessly addicted to Google services that they will use them regardless of the presence of rival offerings.
Hence, I think that this decision will do nothing to prevent Google’s dominance of Android, as it fails to address the central practice that has made Google so successful. Even in the worst -case scenario, Google can pay the fine, make a few adjustments and carry on as normal. Either way, Google Android looks set to remain exactly where it is.
This article was originally published at RadioFreeMobile