FTC Extends Probe Into Google's Android
April 26 2016 - 4:20PM
Dow Jones News
Federal Trade Commission staffers have met with companies in
recent months to examine industry concerns that Alphabet Inc.'s
Google abuses the dominance of its Android smartphone software,
extending a probe that began last year, according to people
familiar with the matter.
The FTC is examining issues similar to European regulators, who
last week charged Google with improperly using Android's status as
the world's most popular smartphone operating system to force
device makers and wireless carriers to favor Google's search engine
and other services. Indeed, the FTC is hoping to access some of the
evidence behind European regulators' case, one person said.
Google and the FTC declined to comment.
The FTC began looking at Android last year amid complaints from
app developers and other tech firms that Google flexes its Android
muscles unfairly. FTC staffers have recently met with and requested
data from at least two companies, these people said, a signal the
probe is progressing and the commission is gathering additional
information.
The investigation isn't necessarily a sign the FTC believes
Google has done anything improper. Commission investigators have
reached no conclusions, and it is too early to say whether the
probe could lead to legal action, people familiar with the matter
said.
There are several reasons why the FTC could reach different
conclusions than regulators in Europe. For one, Europe's
competition laws give antitrust enforcers more power to take action
against dominant companies. Moreover, Android has greater market
share in Europe, running more than 70% of the smartphones in four
of the five largest European Union countries. In the U.S., Android
runs 59% of smartphones, according to research firm Kantar
Worldpanel. Also, U.S. law would encourage the FTC to give Google
credit if its actions had legitimate business justifications and
improved experiences for Android users, even if the conduct impeded
rival firms.
That is what happened in 2013, when the FTC decided not to sue
Google after a lengthy probe into whether the company abused its
dominant market position in Internet search.
In that investigation, FTC competition staffers found that
Google's search results favored its own products and services, but
they recommended against filing a broad lawsuit because of legal
hurdles and Google's "strong procompetitive justifications" for its
actions. Those staffers did recommend the FTC challenge other
aspects of Google's conduct, including its alleged use of content
from rival websites, but the commission accepted some voluntary
commitments from Google instead.
Android questions also are attracting attention on Capitol Hill.
In March, Sen. Orrin Hatch (R., Utah) asked FTC Chairwoman Edith
Ramirez whether the U.S. was investigating European regulators'
concerns about Android. In a written response released this month,
Ms. Ramirez said, "While I cannot discuss the existence of
nonpublic investigations, I can assure you that I am aware of these
concerns."
The EU alleged last week that several of Google's Android
policies are anticompetitive, including a practice of requiring
Google to be the default search engine on any smartphone that has
access to its Play Store, which offers more than one million
apps.
In response, Google said that including its apps and services on
Android devices helps it improve Android software and provide it
free to phone makers. The business model "keeps manufacturers'
costs low and their flexibility high," the company said in a blog
post.
Canadian regulators said last week Google didn't violate their
competition laws, after a multiyear probe in which they consulted
the FTC and European regulators. Canadian regulators said users
can, and do, change their smartphones' default search engine if
they prefer a different one.
News Corp, which owns The Wall Street Journal, has filed a
separate complaint in Europe that Google unfairly copies news
publishers' content and makes it available in search results.
Google has said in response, "Google News and Search send billions
of clicks for free to the websites of news publishers."
Write to Jack Nicas at jack.nicas@wsj.com and Brent Kendall at
brent.kendall@wsj.com
(END) Dow Jones Newswires
April 26, 2016 16:05 ET (20:05 GMT)
Copyright (c) 2016 Dow Jones & Company, Inc.
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