FTC Is Said to Investigate Claims That Google Used Android to Promote Its Products

26 Sep 2015 | Author: | No comments yet »

F.T.C. Is Said to Investigate Claims That Google Used Android to Promote Its Products.

The Federal Trade Commission is looking at complaints that Google Inc. WASHINGTON — Google is back under U.S. antitrust scrutiny as officials ask whether the tech giant stifled competitors’ access to its Android mobile-operating system, said two people familiar with the matter. These people, who spoke on condition of anonymity, described the investigation as being in a preliminary stage, which means it could ultimately go nowhere. The inquiry will look into whether the company’s Android operating system has violated antitrust laws by privileging its own products and services over its competitors’ to an untenable degree, according to the Bloomberg report, which cited competing tech company executives who had complained about Google to the commission. The FTC’s examination of Android-related issues is in its early stages, and it is not clear the commission will allocate significant resources to mount a detailed probe.

FTC officials have met with technology company representatives who say Google gives priority to its own services on the Android platform, while restricting others, added the people, who asked for anonymity because the matter is confidential. Both the FTC and Google declined to comment, the former saying that it does not comment “on an investigation or the existence of an investigation”. Google has been the target of several recent complaints, many to do with its advertising networks – a business worth an estimated $5bn according to industry analyst Brian Weiser. Regardless, it shows the FTC is again turning its attention to one of America’s biggest companies, two years after it closed a separate investigation into Google’s Internet search business.

Android is an “open” system that Google gives away to handset makers, but it comes with a catch: If big phone makers like Samsung or Motorola want to include any Google services, they must take a bundle that includes the Google search engine, Gmail and Google Maps, which comes preinstalled on the phone. A European company called Disconnect complained to the European Commission (EC) earlier this year that its app, which isolated search functions like Google’s from Google’s trackers, had been repeatedly thrown out of Google’s app store. Others have voiced concerns to the FTC over the company’s YouTube Kids app, which they say unfairly exposes children to targeted advertising for unhealthy food, among others.

But to get access to Google’s Play app store and other services that enhance Android phones, they have to agree to put Google’s search service prominently on the devices. The FTC previously conducted a detailed investigation of whether Google abused its dominance in Internet search, but closed that probe in early 2013 without bringing a case. In an investigation into anticompetitive behavior, the FTC “would have to prove that [Google’s] conduct creates or increases market power”, said Fox. “In the EU, it’s a level playing field argument, and a competition on the merits argument.

But in what they termed “a close call,“ the staffers recommended against a broad lawsuit, citing legal hurdles and Google’s “strong procompetitive justifications” for its actions. FTC competition officials in the previous investigation recommended challenging three Google practices, including its alleged “scraping” of content from rival websites. You have to go further and prove that prices will go up and that less will be produced.” With relationship to advertising, Fox said, those arguments are abstract and hard to make.

The Android mobile platform ties together several Google products, including search and maps, into one bundle, echoing the even more dominant Microsoft Windows platforms of nearly two decades ago. The FTC investigated Microsoft in 1993 over misuse of its market share through product bundling; that investigation closed but the Department of Justice then sued the company in 1998 over the same concerns, specifically its promotion of its own Internet Explorer over Netscape Navigator.

In 1998, the U.S. claimed Microsoft unlawfully protected its Windows monopoly by keeping computer makers from promoting Web browsers that competed with its Internet Explorer. They say they have been hampered in their attempts to get prominent positioning on Android phones or to win the status of a preinstalled, default app for their products.

If consumers can go to other manufacturers to avoid the bundled product, there’s likely no antitrust violation, First said. “The question for Android is do they really have sufficient market power, particularly in a world where there are other mobile-phone operating systems?” he said. Two days later, FTC Chairwoman Edith Ramirez and two commissioners defended the decision to close the investigation, saying it had been in accord with recommendations from staff in the competition and economics bureaus.

It has accused Google, Amazon.com Inc. and Apple Inc. of wrongly billing consumers for unauthorized purchases made by children on mobile applications. They are also examining whether handset makers are blocked from developing their own versions of Android, adding to Google’s worries in a region that makes up one-third of its revenue. If the commission moves ahead with the case, it would have to lay out its main concerns in a so-called statement of objections, which gives the company an opportunity to respond.

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