In July 2018, the European Competition authorities imposed a fine on the technology firm Google of €4.3 billion for abuse of monopoly power associated with its mobile operating system, Android. This followed a fine of €2.4 billion in 2017 for abuse of monopoly power relating to the way it presented shopping services returned in searches. The EU Competition Commission argued that Google prioritized its own shopping services above those of competitors when users entered search queries. The fine relating to its Android operating system concerned the way in which device-makers were ‘forced’ to pre-install Google search engines. The EU Commission argued that with around four-fifths of global smart mobile devices utilizing Android as an operating system, this action prevented innovation and competition.
For its part, Google argued that far from limiting competition, its actions actively encouraged competition. The CEO of Google, Sundar Pichai, presented a counter argument that cited the benefits to developers, phone manufacturers and app manufacturers of the ‘free’ distribution of the Android platform. This, he argued, created an ‘ecosystem’ which has spawned over 1,300 different Android brands. The development of this ecosystem was of direct benefit to consumers and provides more choice not less. The EU Competition Commission was not convinced of the arguments put forward by Google.
The European Commissioner for Competition, Margrethe Vestager said:
Today, mobile internet makes up more than half of global internet traffic. It has changed the lives of millions of Europeans. Our case is about three types of restrictions that Google has imposed on Android device manufacturers and network operators to ensure that traffic on Android devices goes to the Google search engine. In this way, Google has used Android as a vehicle to cement the dominance of its search engine. These practices have denied rivals the chance to innovate and compete on the merits. They have denied European consumers the benefits of effective competition in the important mobile sphere. This is illegal under EU antitrust rules.

Critical Thinking Questions
1 To what extent do you think a fine and instruction to cease the practice are sufficient to change the practices of a firm such as Google?
2 Google argued that its Android operating software was in competition with Apple’s iOS and therefore was not a monopoly. Do you agree with this point? Explain.
3 In a blog post after the ruling, Google’s CEO noted that there were 1, 300 brands powered by Android and 24,000 different devices at every price point. He went on to comment:
The phones made by these companies are all different, but have one thing in common – the ability to run the same applications. This is possible thanks to simple rules that ensure technical compatibility, no matter what the size or shape of the device. No phone-maker is even obliged to sign up to these rules – they can use or modify Android in any way they want, just as Amazon has done with its Fire tablets and TV sticks.

Why do you think the EU Competition Commission dismissed these arguments?
4 The Commission argued that there were two examples of illegal tying in this case. Can you identify any potential benefits to tying which might mean that it should not be seen as always being reflective of monopoly power?
5 How important is it that monopolies are regulated by agencies such as the European Competition Commission?