The fine Google giant of Europe is too small, too late

Google was hit with a $ 5 billion fine from the European Commission on bundling Android apps yesterday. Although the fine is the highest ever imposed by the EU on a single company, it is the changes on Android that Google must now make that are much more important. But they are probably too small, too late.

Google will now be forced to ungroup its Chrome browser and Google search applications from Android; which means that phone manufacturers will not have to ship Android phones with these pre-installed apps. In addition, phone manufacturers will be able to forearse the open source version of Android and still be allowed to manufacture devices with Google's Android software, which means that we could see more competitive variants of Android. Android's major phone manufacturers. Google would never do all this on its own, of course, but it has no choice. He is accused of using anti-competitive practices with Android to boost his own range of web services.

The case of the European Commission focuses on the rules that the Android phone Manufacturers are forced to follow by Google, and to better understand these , you must know that Android exists in two distinct flavors. The first is the basic Android software, better known as the Android Open-Source Project, or AOSP. This has few restrictions and phone manufacturers can basically do what they want, install applications and services before shipping phones to customers.

But most phone manufacturers do not ship devices with AOSP outside of China. Access to the Google Play Store (which is necessary to get just about all the popular apps from Uber to Instagram). And if you want the Google Play Store, you must follow the rules of Google. They force phone makers to bundle 11 Google apps, including Google, Chrome, YouTube, Gmail and Google Maps. This grouping also means that many of the best Android apps will simply not work on AOSP because they do not include the most important Google APIs. Basically, there is no free meal: if the phone makers want to offer users the apps that they expect from a smartphone, they must also include Google products.

Of the 11 applications, Android phone manufacturers need to install, the EU is specifically concerned about two: Google Search and Chrome browser. There are good reasons to focus on these. Google has over 90% market share of search engines worldwide and about 60% market share of browsers. Android accounts for about 85% of the entire smartphone market, and the grouping of Google Chrome and Google Search in the OS is clearly designed to maintain these monopolies.

Illustration by William Joel / The Verge

Google also dominates with other web services, however. YouTube is the main way people are using video right now; More than a billion people use Gmail every month. Google Maps is widely used to navigate the world. This means that despite the changes that Google is forced to do, the EU is only targeting a small portion of the mbadive power of the company. Critics say these actions will not have much effect now.

"The EU's position is probably 6-8 years too late," says Ben Wood, head of research at CCS Insight. "Android has already helped establish Google applications and services as essential elements for consumers in the Western world, although the separation of applications from the operating system can foster long-term competition. Manufacturers will continue to offer competitive Google services and respond to consumer demand. "

Consumers generally stick to a reliable default application for a device or look for a reliable alternative. Google's services and applications are both reliable and reliable, and the EU leaves it up to the company to decide how it will now change Android. "I have not made any suggestions on how Google should solve this problem," said Margrethe Vestager, European Commissioner for Competition, at a press briefing yesterday. "I think a number of different choices can be made by Google and it's up to Google to make those choices."

This means that despite frequent comparisons, Google does not face a "Microsoft moment" with this judgment. While the similarities are evident in Microsoft's long antitrust battles in the United States and Europe, Google is not obliged to provide a ballot for browsers or search engines in Android. The EU will closely monitor how Google is implementing the changes, but it clearly recognizes the challenges of unbundling Google Chrome and Google. "The EU needs to take a broad and pragmatic view of the complexity of the Android ecosystem, the interdependencies and the relationship with Google's broader business model," says Wood. "While Google's strength is an understandable concern, too arbitrary measures could ultimately hurt the consumer and only strengthen the position of a major competitor in Apple."

avoided the same scrutiny on the part of regulators as Google, despite its own means of foreclosure consumers in its applications and services on iOS. Apple has removed the built-in versions of Google Maps and YouTube with its iOS 6 update, and the company has been trying to create a competitor worthy of appearing on Google Maps. Many have pondered why Apple has not received similar complaints from the EU about its own restrictions. But that's because despite Apple's obvious dominance in high-end phones as a single iPhone maker, it still controls only 15% of the global smartphone market. It also does not have a search engine or iOS license for other phone manufacturers to produce low-cost devices, avoiding the business model of charging for an operating system or generating revenue. service revenues. Apple could face scrutiny in the future thanks to the increase in its service revenues, but for the moment its model relies mainly on the sale of equipment with lucrative margins.

The $ 5 billion fine represents just over two weeks of revenue for Google, but it's the changes to Android that are making the Web giant angry. Google warned that the EU decision could affect the basic free nature of the Android model. Google distributes Android to phone manufacturers and monetizes users through advertising targeting, thanks in part to its bundled apps and services. If it can not effectively bundle these applications and services, or if phone makers like Samsung start to regroup into search engines like Bing or rival web browsers, that could put Google's mobile ad revenue at risk. Google makes more than 50% of its revenue from digital ads on mobile ads, so it's a huge market.

But Google's course has not plummeted on the news, which also reflects the fact that Google is forced to do so will not have immediate impact. Google no longer needs to push its applications to consumers because consumers want them . They are often the best available, and it's hard to list solid competition for services like YouTube, Google Search, or Google Maps. Even on iOS, Google's apps are consistently among the top 20 download listings, showing that consumers are ready to search for them.

It's too early to say exactly how Google is going to get it, but the EU's current decision is very little to challenge the many ways Google uses Android to promote its other mainstream services like YouTube or Google Maps. Phone manufacturers will now have a little more power over apps that are grouped on handsets, but Google has shown that it is ready to threaten Android licensing fees as an alternative.

The decision is designed to encourage competition, and we could see some of Chinese phone makers or even Amazon's own devices. Amazon ships a forked version of Android, but the decision of the EU still means that Google Play Store is limited to the licensed version of Google 's Android. Amazon is not likely to switch just because Google Search and Chrome are no longer bundled, because the company's Fire tablets are designed to be vehicles for Amazon's own services. Likewise, other phone manufacturers will still need access to the Google Play Store so consumers can even consider their devices.

In the end, it's the consumer who could lose if Google decided to pursue licensing fees for Android. Given Google's dominance over web services, it's unlikely that Android will change significantly from this one decision alone, but the EU now needs to carefully manage how Google unbundles Google Chrome and Google Search from Android.