Google Accused of Unfair Competition

European officials have formally accused Google of breaching competition rules in the way it handles the Android system. They say the company unfairly used the system to push its search services.

The claims come from the European Commission, the equivalent of the executive branch of the European Union. It oversees some elements of competition law that apply across 28 countries.

The Commission has issued a Statement of Objections, which is formal notification that it is investigating alleged breaches. Google now has 12 weeks to respond to the claims. If found guilty it could face financial penalties that may be particularly heavy for Google as the maximum amount is a proportion of the company's turnover.

Allegations Are Three-Fold

The statement details three main allegations surrounding the Android operating system, a system Google developed but makes available to device manufacturers without charge. The first is that Google told manufacturers they would only be allowed to preinstall certain Google-owned apps such as YouTube if they agreed to also install the Google Search app and the Chrome Browser, and to make Google the default search tool on the phone.

The second allegation is that Google banned manufacturers from selling phones and tablets which used a modified version of the Android code, which is supposedly open source.

Finally, officials say Google offered financial incentives to manufacturers who agreed to not only install Google Search but to install no rival search-related apps.

Microsoft Previously Hit By Euro-Probe

The claims are somewhat reminiscent of similar charges laid against Microsoft over its installation of Internet Explorer as the default browser on Windows PCs. That led to a fine worth the equivalent of US $794 million.

In both cases, the cases were brought under a principle of European competition laws that block "the abuse of a dominant position which may affect trade and prevent or restrict competition." The European Commission says Android is used on around 80 percent of smartphones and tablets and that "Google's behavior denies consumers a wider choice of mobile apps and services and stands in the way of innovation by other players." (Source: europa.eu)

Google says it will respond to the claims and "demonstrate that Android is good for competition and good for consumers." (Source: wsj.com)

What's Your Opinion?

Is Google acting unfairly? Should companies have free reign to decide how manufacturers can use their software, particularly when giving it away free of charge? Does Google's market share mean it should be prevented from imposing conditions that would be acceptable from a smaller company?