Android dominance targeted in Microsoft, Nokia antitrust complaint
FairSearch, a coalition of 17 technology and search firms including Microsoft (NASDAQ:MSFT), Nokia (NYSE:NOK), Oracle, Expedia and Hotwire, has filed a formal complaint with European antitrust regulators alleging that Google (NASDAQ:GOOG) is exploiting its open-source Android mobile operating system to "cement its control over consumer Internet data for online advertising as usage shifts to mobile."
Google is using Android as a low-cost "'Trojan Horse' to deceive partners, monopolize the mobile marketplace and control consumer data," said Thomas Vinje, an attorney representing the FairSearch group, citing contractual agreements requiring Android device manufacturers to pre-install Google apps and services and award them prominent default placement. The complaint calls on EU officials to probe Google's "deceptive conduct to lockout competition" in the mobile market, adding "Failure to act will only embolden Google to repeat its desktop abuses of dominance as consumers increasingly turn to a mobile platform dominated by Google's Android."
According to FairSearch, Android powered 70 percent of smartphones shipped at the end of 2012. The group adds that Google controls 96 percent of the mobile search advertising market, citing eMarketer data.
Speaking Monday to The New York Times, EU antitrust chief Joaquín Almunia declined to comment on the FairSearch complaint but said officials are examining Android independently of its two-year inquiry into whether Google has abused its Internet search power. Almunia added that he expects to receive proposals from Google this week to clear up concerns over its search practices, expressing hope that the proposals will make it easier for consumers to identify when Google is promoting its own services as opposed to competing efforts that might deliver superior results.
"What is clear in our view is the market dominance of Google," Almunia said. "This is obvious."
Almunia added that Google must offer EU officials a solution that makes both Google-branded search results and competitor results visible within the search engine on both mobile devices and the desktop. "I don't know if you should call it labeling, or whatever, but they need to distinguish," Almunia explained. "In some cases this can be achieved through the information you will receive through the natural search results. In other cases, maybe we will ask Google to signal what are the relevant options, alternative options, in the way they present the results."
Almunia also said that "it would not be surprising" if Google faced formal charges in a case concerning its Motorola Mobility device manufacturing unit. Both Microsoft and Apple (NASDAQ:AAPL) have filed complaints against Motorola Mobility, alleging unfair licensing conditions and abusive litigation.
Contacted by The New York Times, Google spokesperson Al Verney declined to specifically address either the FairSearch complaint or Almunia's comments, saying only that the company continued "to work cooperatively" with the EU commission.
Google has already cleared one antitrust hurdle: In January, the Federal Trade Commission closed a 19-month inquiry into Google's search business and determined the company had not violated competitive restrictions in the U.S. market.
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