Google faces renewed US antitrust scrutiny, this time over Android

26 Sep 2015 | Author: | No comments yet »

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

The U.S. The Federal Trade Commission has started investigating complaints that the Internet giant unfairly uses its Android mobile operating system to bolster popular Google products like Google Search and Google Maps, according to two people involved in the inquiry. 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 Android mobile platform is a key element in Google’s strategy to maintain revenue from online advertising as people switch from Web browser searches to smartphone apps. The FTC’s examination of Android-related issues is in its early stages, and it isn’t clear the commission will allocate significant resources to mount a detailed probe. 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”. FTC officials have held meetings recently with app developers and other providers of online services who have complained about Google’s control over Android, one person familiar with the meetings said.

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. 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. In a blog post in April, a top Google executive defended the way the company handles Android, saying other firms could use Android without Google but that working with Google benefits consumers by giving them a better experience with their phone. ‘The stakes are extremely high, because Google’s behavior impacts the entire mobile ecosystem, including map and location services, and app developers,’ the group said in a statement. 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. That means that, in theory, Google can stop a carrier from promoting its own services that compete with Google’s by withholding permission to use key apps. After that settlement, the FTC was embarrassed by the inadvertent release of documents that showed key staff members argued that Google broke antitrust law. 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.

To go after Google, the FTC would have to show that it has a big enough share of the market to be dominant and that they prevent rivals from being able to compete for consumers’ attention, said Andre Barlow of the law firm Doyle, Barlow and Mazard PLLC. Lockheimer said Google’s agreements with manufacturers ensured that Android phones would work well when people first bought them, by getting basic services like email and maps preinstalled and functioning harmoniously. 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. Lockheimer also said that even smartphone makers who use Google’s licensed version of Android are allowed to preload, in prominent positions, apps and services from Google rivals like Facebook Inc. and Microsoft Corp. Meanwhile, the European Union is moving forward with its own antitrust case against Google, which, in addition to questing Google’s Android practices, alleges that the company stifled competition in the online shopping market.

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. 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.

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.

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.

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