The news report said that the EU is planning to make a ruling on Google’s market dominance of Android’s abuse of Android system next month, smashing its second punch in Google’s “three-shotâ€, and this punishment is likely to touch Google. The core business model has become the heaviest punch in this combination.
FT quoted people familiar with the matter as saying that EU competition commissioner Margrethe Vestager will announce the results of the EU survey within a few weeks, and this will be the most significant regulatory intervention that Google's business model has encountered so far. At present, the amount of the specific fine is still unknown, but according to relevant regulations, the European Commission can issue a maximum of 11 billion US dollars in price penalties to Google's parent company, Alphabet.
After the news came out, Google A shares once fell 1.2%, but then the decline narrowed, down 0.35% at the close. In subsequent after-hours trading, Google's share price continued to fall slightly by 0.13%.
EU "three strikes"
The “fighting†between the EU and Google began eight years ago when companies and consumer groups from the US and Europe accused Google of ranking e-commerce sales products through its search engine, thereby making other e-commerce The platform is at a disadvantage in the search ranking.
The survey lasted for 7 years. The European Union issued a huge amount of 2.4 billion euros (about 2.7 billion US dollars) to Google for a more favorable ranking for its home appliance business because it determined that Google abused its dominance in the search engine market. The biggest penalty for companies to disrupt market behavior.
In addition to web page search rankings, Google is also facing antitrust investigations in the Android operating system and online advertising market in Europe. In 2016, the European Union accused Google of abusing Android's dominance in the European mobile market, setting unfair restrictions on mobile device manufacturers and network operators equipped with Android. In the same year, the EU once again issued a complaint against Google, saying that Google is in the AdWords advertising service. Signing strict contract terms with partners violates EU antitrust laws.
This time, the EU's punishment for Google is the second boxing in the "three combos": FT pointed out in the report that the EU will impose a fine on Google's parent company Alphabet, that is, the company abused Android system in smartphone operation. The dominant position in the system market. Compared with the huge fines a year ago, the EU's punishment can really touch Google's most basic business model in the mobile Internet era, that is, through the widely used Android system, to ensure the use of Google search and application stores on the terminal products, Thereby consolidating Google's search and advertising business.
Deng Zhisong, a senior partner of Beijing Dacheng Law Firm, told the 21st Century Business Herald in an interview that although the Android system is open source, its entire system is firmly controlled by Google and its market share is quite high.
According to market research firm Gartner, Android accounted for 84.8% of the global new smartphones sold in 2016. The iOS system used by Apple phones accounted for 14.4%, and other systems accounted for only 0.8%. In 2017, the market share of Android system further increased to 85.9%, iOS was 14%, and other system market shares further decreased to 0.1%.
At the time of the complaint in 2016, the European Commission had pointed out that Google had prioritized the addition of its own products and applications for Android, and did not allow the operating system of competitor companies to run on the open source code of Android. In addition, the European Commission also accused Google of the financial benefits in exchange for mobile phone manufacturers to pre-install Google software.
Deng Zhisong explained to reporters that if Google does require smartphone manufacturers to pre-install Google software while using Android, this behavior may be suspected of being bundled.
"In China, Article 17 of the Anti-Monopoly Law also stipulates that enterprises with market dominance are prohibited from tying goods without justifiable reasons. If the market share reaches 50%, these actions are not allowed, otherwise It may constitute an abuse of market dominance." He said, "In that year, Microsoft was also investigated by the European Commission for bundling Internet Explorer in Windows."
Digital antitrust or further tightening
When talking about anti-monopoly in the digital field, Deng Zhisong said that from the perspective of legal elements, this is not much different from the anti-monopoly of traditional industries. The difference between the two is mainly in the form of expression.
He pointed out that whether in Europe, the United States or China, there are so-called "bilateral markets" on the Internet platform. “A lot of Internet services seem to be free, but this is just a 'bilateral' side.†Deng Zhisong said, “Companies will make money through other means, such as advertising and value-added services, which constitutes the other side, we call it’ Bilateral market '.'
On this basis, scale has become another factor. "The bigger the scale, the stronger it is, and the more data there is, the more market power it has." Deng Zhisong said.
Google’s troubles are not only from the European Union. According to a recent report by the Washington Post, a senior Democratic congressman in the US Congress is also calling on the US government to investigate Google. This may be seen as another example of the changing attitude of the US legislature to technology giants.
Democratic Party member Keith Ellison sent a letter to the US Federal Trade Commission (FTC) on May 31, suggesting that regulators follow the pace of the EU, "keeping" Google and its parent company Alphabet, judging whether it has similar behavior in the US, and Whether the class behavior violates the FTC regulations.
It is worth mentioning that the FTC just changed its leader a month ago, and Joseph Simons became the new chairman of the agency, and he previously thought that the FTC should “put a lot of resources to find out whether its regulatory attitude toward major mergers is too loose. ". It is believed that Simons will hold a more stringent attitude toward corporate mergers and monopolistic behavior.
The Washington Post believes that if Democrats win in the mid-term elections of 2018, Silicon Valley technology companies, represented by Google, may usher in a more aggressive regulation.
Earlier, the FTC had launched an antitrust investigation against Google during the Obama administration, when some consumers and competitors including the US online review site Yelp accused Google of giving priority to its own service in the search results rankings. It is also the reason why the EU issued a ticket to Google last year.
However, the FTC did not ask Google to split after the investigation, nor did it require Google to make adjustments to the business model. In a recent letter, Ellison urged the FTC to disclose more information about the previous survey. In addition to Ellison, Richard Blumenthal, Ed Markey and Elizabeth Warren have also appealed to the FTC to investigate Google or the Internet giant they represent.
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