December 6, 2024

Europe Receives Complaint About Google’s Android

The complaint was filed by Fairsearch Europe, a group of Google’s competitors, including the mobile phone maker Nokia and the software titan Microsoft, and by other companies, like Oracle. It accuses Google of using the Android software “as a deceptive way to build advantages for key Google apps in 70 percent of the smartphones shipped today,” said Thomas Vinje, the lead lawyer for Fairsearch Europe, referring to Android’s share of the smartphone market.

For example, phone makers that agree to use Android — and that also want Google applications like YouTube — face contractual requirements to place those applications and other Google-branded applications in prominent positions on the mobile device’s desktop, Mr. Vinje said.

In an interview on Monday, the European Union’s antitrust chief, Joaquín Almunia, declined to comment on the new complaint but said officials had been examining the Android operating system independently of the two-year inquiry into whether Google had abused its dominance of Internet search.

When a formal complaint like this is made, the commission must at some point decide whether to take up the case or drop it.

Mr. Almunia also said that he was receiving proposals this week from Google to clear up concerns about its search practices, and that he hoped they would make it easier for Internet users to identify when Google was promoting its own services rather than those of competitors who might offer better results.

“This is a new step in the investigation,” he said.

A Google spokesman, Al Verney, would not specifically discuss either the new complaint or the comments by Mr. Almunia about the search case, saying only that the company continued “to work cooperatively” with the commission.

The European Commission opened its antitrust inquiry into Google’s search practices in November 2010. The investigation has since focused on whether Google might have unfairly taken advantage of its market dominance by giving preference to links to its own services, like Google Maps, when answering queries; whether Google disadvantaged competitors by including material in search results that came from other Web sites; and whether Google conducts its advertising business in accord with European antitrust law.

Last May the commission suggested that Google propose changes in how search results are presented as a way to settle the case. Since then, regulators and Google have been negotiating over those changes and other terms.

In Monday’s interview, Mr. Almunia said Google needed to offer the commission a solution where choices between Google-branded search results and those of its competitors were clearly visible within the search engine both on desktop computers and on mobile devices.

“I don’t know if you should call it labeling, or whatever, but they need to distinguish,” Mr. Almunia said.

“In some cases this can be achieved through the information you will receive through the natural search results,” he said. “In other cases, maybe we will ask Google to signal what are the relevant options, alternative options, in the way they present the results.”

The choice “should be a real one,” he said.

Mr. Almunia said regulators were not requiring Google to make changes to its algorithm, the secret formula that the company uses to determine the best responses to search queries.

In terms of the way Google uses and displays snippets of information from other Web sites in its search results, he said he expected Google to accept that other companies could choose “to allow or not to allow Google to use the content, but this decision cannot have as a consequence the punishment of those who will not allow the use of the content in terms of search results.”

Web sites and some publications have complained in recent years of virtually disappearing from Google’s search engine if they posed a competitive threat or did not comply with Google’s terms.

Mr. Almunia said he would test any changes that Google proposed to make by sending questionnaires to competitors, including the complainants, and to other companies.

Mr. Almunia said in Europe, where Google is especially strong, with more than 90 percent of the search market, compared with about 70 percent in the United States, it is particularly difficult for search engines to establish themselves if they focus on narrow but deep services like online shopping, travel or mapping.

But Mr. Almunia also said his approach in the case was not aimed at “protecting competitors,” as critics of European regulation have long complained.

Mr. Almunia said that he had concerns that Google had abused its dominance to promote its own products but that he would not need to “find a final answer to this question” if Google reached a settlement. “We are concerned by the possibility of an abuse,” he said.

“What is clear in our view is the market dominance of Google,” Mr. Almunia said. “This is obvious.”

He also noted that “it would not be surprising” if Google faced formal charges in a case concerning Motorola Mobility, a mobile phone maker owned by Google. That case follows complaints by Microsoft and Apple that they were victims of unfair licensing conditions and abusive litigation by Motorola Mobility.

The commission has taken a tougher line with Google than has the Federal Trade Commission on the issue of how Google runs its search rankings. The F.T.C. decided in January, after a 19-month inquiry into how the company operated its search engine, that Google had not broken antitrust laws.

Article source: http://www.nytimes.com/2013/04/09/technology/09iht-google09.html?partner=rss&emc=rss

Europe to Fine Microsoft for Breaking Antitrust Deal

On Wednesday, the European Union is expected to impose a large fine on Microsoft for failing to give users of the company’s Windows software a choice of Internet browsers. It would be the first time that European regulators had punished a company for neglecting to comply with the terms of an antitrust settlement, and it could signal a tougher approach to enforcing deals in other antitrust cases, including one involving Google.

Microsoft and officials at the European Commission reached an antitrust settlement in 2009 that called on the company to give Windows users in Europe a choice of Web browsers instead of pushing them to Microsoft’s Internet Explorer. But Microsoft failed to offer users such a choice for more than a year — apparently without anyone at the company or the commission noticing.

Last July, the company admitted the problem and apologized. It said the failure was a result of a technical issue that had escaped its notice, and it updated its Windows 7 and Windows 8 software to give European users the browser choice.

In October, Europe’s antitrust chief, Joaquín Almunia, charged Microsoft with failing to live up to the agreement.

The amount of the fine could not be learned on Tuesday. Mr. Almunia’s office and Microsoft executives declined to comment.

The decision to fine Microsoft comes as Mr. Almunia’s office is negotiating with Google to try to resolve the commission’s concerns about that company’s dominance of the Internet search and advertising markets. Even if Google and the commission reach a settlement, a substantial fine for Microsoft would serve as a warning that a company violates such a settlement at its financial peril.

“It’s important for the commission to show it’s serious in this case because this will set a precedent, and because the commission increasingly uses settlements to help reach solutions more quickly, especially in the fast-moving technology sector,” said Nicolas Petit, a professor of competition law and economics at the University of Liège in Belgium.

“The commission also has an incentive to slap on a big fine in this case to ensure that companies, which are hard to monitor, get the message that it will be costly down the road if they get caught defying settlement orders,” Mr. Petit said.

In theory, Mr. Almunia can levy a fine totaling up to 10 percent of a company’s global annual revenue. In Microsoft’s case that could mean a penalty of $7 billion, but analysts say it is highly unlikely to reach that level.

The largest fine ever levied by the European authorities in an antitrust case was 1.1 billion euros, or $1.4 billion, in 2009 against Intel for abusing its dominance in the computer chip market. Intel is still appealing that ruling.

Microsoft has paid a long series of fines to European regulators over the past decade.

In 2008, it was fined nearly 900 million euros in so-called periodic penalties for defying a decision that regulators had imposed on the company.

The amount was subsequently reduced to 860 million euros after the company appealed to the General Court of the European Union.

Microsoft also paid fines of 497 million euros and 281 million euros for separate but related offenses, bringing the total to 1.7 billion euros during its battles so far with European regulators.

Although Microsoft has appealed past punishments, it may be reluctant to do so this time, preferring to focus on its rivalry with Google. Microsoft is among the companies that have complained about Google’s business practices to the commission.

The commission has been formally investigating Google since November 2010.

Mr. Almunia offered the company a settlement in May 2012 after finding that it might have abused its dominance in Internet search and advertising by giving its own products an advantage over those of others, even while maintaining that it offered neutral results.

Mr. Almunia and Google have been negotiating since then, and a final agreement may not come until later this year, suggesting that the strategy of seeking quick results in antitrust technology cases through settlements instead of lengthy legal battles could be coming undone.

The commission has taken a tougher line with Google than American regulators did. The Federal Trade Commission decided in January after a 19-month inquiry that Google had not broken antitrust laws. But Mr. Almunia has insisted that Google make changes to the most sensitive area of its business, online search.

The latest dispute stemmed from the settlement of a case concerning Microsoft’s dominance in Internet browsers, a dominance that the company has ceded to market forces in recent years.

In Microsoft’s settlement of 2009, the company did not pay a fine but agreed to install a system called Browser Choice Screen with Windows. It was intended to offer alternatives like Google Chrome and Mozilla Firefox to counter the strength of Internet Explorer, Microsoft’s own browser.

The choice must be offered for five years, according to the agreement.

Millions of European users of the Windows 7 SP1 version of the software may not have been offered a choice of browsers from February 2011 to July 2012, Mr. Almunia said.

The company said it learned of the error when the commission sent a notification about reports it had received indicating that alternative browsers were not being offered on some personal computers.

Microsoft’s failure to comply with the European order has already resulted in financial penalties of a different sort for the company’s own executives.

In a filing with American financial regulators last October, Microsoft said that Steven A. Ballmer, the company’s chief executive, and Steven Sinofsky, then the head of its Windows division, received less than the full annual bonuses they were eligible for, in part because of the browser issue in Europe.

A month later, Mr. Sinofsky left the company in a decision that was described as “mutual” by people briefed on the matter.

Nick Wingfield contributed reporting from Seattle.

This article has been revised to reflect the following correction:

Correction: March 5, 2013

An earlier version of this article misspelled the first name of a former executive with Microsoft. He is Steven Sinofsky, not Sinfosky.

Article source: http://www.nytimes.com/2013/03/06/technology/europe-expected-to-levy-big-fine-against-microsoft.html?partner=rss&emc=rss