Google Fined…For Giving Users Google?

Almost everyone worldwide knows about the divide between Android and iOS.  How could you not? We hear people brag about how their operating system is in every way superior to the other and people are fools for giving business to the other end of the spectrum.   But competition happens on different tiers and the E.U. recently decided that Google has been unfairly monopolizing the market.  The cost of this? $5 billion.

Some background:

The E.U has fined Google a record €4.34bn for its use of the Android operating system to “illegally cement its dominant position” in search.  The argument goes that while Google has competition on the highest tier of competition (Android vs iOS), once a user chooses to purchase an Android phone their options are severely limited.  As a phone manufacturer if you want the Google Play Store on your phones (which you definitely do), then you also have to take the Chrome browser and Google Search along with it.

Google operating systems coming preloaded with their own associated software…sounds unfair right?  Margarethe Vestager, The European Commissioner for Competition, says that it is.  Vestager argues that Google’s withholding of the Play Store except as a package deal essentially locks down the market for other search engines.  Google has also made payments to large manufacturers as part of an agreement to exclusively pre-install the Google Search app on their devices.

The commissioner has acknowledged that Android in no way forbids users from downloading other browsers if their interested (last year Opera Mini and Firefox were downloaded more than 100 million times).  She asserts that this is far too small though since few people take the action to actively change their default settings.   Google holds the real decision making power, a sign of monopoly, not free markets.

Google’s response:

So we have competition at the operating system level, and competition at the browser level.  Google has responded saying that there’s a level far more important to the world: the app level.  While the Google Play Store is owned by Google, millions of developers contribute and share their creations on it.  Sundar Pichai, Google’s CEO, released a written statement yesterday explaining how unjust the E.U. sanction really is, as Google has taken steps to encourage a competitive market.

“Rapid innovation, wide choice, and falling prices are classic hallmarks of robust competition and Android has enabled all of them,” he wrote.  With such a small barrier to entry for developers/companies who want to share their apps with the world, Android should be seen as a free market advocate, not a giant that is terrorizing our decisions.

This is where tiers of competition become crucial in the discussion.  Does google have a fair amount of competition as an operating system?  Do they have competition as a search engine/browser?  Does their Play Store have other serious contenders trying to take its place?

How hard is it to Switch?

Sundar pointed out (with a short video), that user’s can delete their default browser and download another (such as Opera Mini) within 30 seconds.  Hardly a barrier to entry in terms of difficulty.  The monopoly discussion then becomes is it reasonable to ask users to take this course of action to be presented with other options.  100 million people is a lot, but out of 2 billion worldwide android user’s it’s not a majority.  Still, if users want to find another service, the options are there.

As crazy as it is, $5 billion is a raindrop in Google’s budget.  But it’s not really about the money (yes it is…), it’s about the image that Android upholds.  As a developer that has shared my creations on the Play Store I’ve seen it encourage users to build and share with the world.   Google is an industry giant, of that there is no doubt, and Sundar signed off saying that they intent to appeal.  Stay tuned and we’ll be sure to write about where things go from here.

What are your thoughts on Google’s role as a Monopoly terror or a free market advocate?  Let us know in the comments below!