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Monday, April 19, 2021

Google Faces the First of Many EU Antitrust Cases

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Google is also being sued in South Korea and Italy. Photo: Luis Sinco/Getty Images

Google Inc. is facing two multibillion-dollar antitrust suits filed on Wednesday in Germany that are targeting the company’s dominant search engine, Android. The action in Germany focuses on Android in particular and is distinct from a similar antitrust case filed earlier this month in South Korea.

What’s the case in Germany?

In June, two German tech start-ups, SusanKarronEnten, the maker of Kollector, a popular smart watch, and Renki, a solar energy start-up, said they had been blocked from selling devices running on Android because of a web of opaque “monopoly practices.”

“The issue here is that while Google serves up its web search results through its Android operating system, it also has control over the interfaces for operating system apps such as YouTube, Google Maps, Google Search, and more,” the plaintiffs said in a statement.

Until a few months ago, Android was offered free to smartphone manufacturers and governments. But as smartphone shipments skyrocketed in emerging markets such as China and India, Google began showing extra prominence to its own shopping and travel apps in its Android interface.

That made developers of third-party applications for Android, such as Kollector, start to complain about how Google handled the software inside the operating system. These complaints — which involved a new version of Android that excluded some third-party applications — eventually resulted in a technical bug in Google’s apps, which caused apps to crash in mid-use and led to product recalls.

After investigating the complaints, the German Federal Cartel Office said that Google had violated an antitrust agreement that the company had signed with the Cartel Office in 2015. The pact prohibited Google from making discriminatory use of smartphone operating systems or the apps within those operating systems.

Under the terms of that agreement, Google would promise that its smartphone operating system wouldn’t require third-party software on phones and from Android device makers. The Cartel Office requested that Google negotiate changes to its practices with software developers in the hope that such a change would satisfy the complaint.

What’s the lawsuit in South Korea?

Google has also been sued in South Korea. A group of Korean internet companies are seeking up to $17 billion in damages, based on data found by the Federal Cartel Office in the investigation of Android. Google has lost the first round of its defense.

The plaintiffs allege that the number of downloads of Google search and YouTube app has plunged over the past three years as local rival Naver has become the dominant player, according to Reuters.

The Cartel Office said that Google had breached antitrust regulations by reserving its own internet search products, including the top-ranking Google search results, for Android devices. The search monopoly alleged in the suit is about 10 percent, rather than the roughly 98 percent control the Cartel Office was alleging earlier.

A hearing in the case will be held in October of next year. If the court agrees to put the case on trial, Google could have to pay damages.

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