Consumer Impact of EU’s Action Against Google Won’t Be Obvious
(Bloomberg) -- Even for Google, a $5 billion antitrust fine isn’t pocket change. But the real question on everyone’s lips after the European Commission laid down the law was: “What happens now?”
What we know for sure is that Google plans to appeal the ruling, and has a little over two months to do so at the EU's General Court. My colleague on our legal news team in Brussels, Aoife White, says the company could also file "interim measures" to halt the cease-and-desist order pending the appeal —something very rarely granted.
Meanwhile, consumers are in the dark about how this all might affect them, because the EU hasn’t specified how it wants Google to comply with its orders to stop using smartphone and tablet manufacturer contracts to promote its own Android apps.
This wasn’t always the case. In 2004, the EU fined Microsoft for abusing its "near monopoly" of the PC market with the distribution of Windows Media Player. The software maker was forced to release an entirely different version of Windows that didn't include the application for playing audio and video files. The new iterations released in Europe were called XP Home Edition N and XP Professional N. ("N" literally stood for "Not with Windows Media Player.”)
In another ruling against Microsoft five years later, the EU demanded the company offer users alternatives to its Internet Explorer web browser when configuring Windows. Apart from the company’s own product, it had to include Google’s Chrome and other browsers. Once again there was a clear —although today quite ironic— impact of the EU’s order for consumers to see.
Damien Geradin, a partner at competition law firm Euclid Law, suggested people might see the world’s biggest software developers trying to strike deals with device manufacturers for a presence on their products. “There could be a possibility for companies,” he said. “But if the real estate goes for money, Google can still beat everyone on economics.”
This is certainly true for search engines. According to a Bernstein analyst note cited by CNBC last year, Google paid Apple about $3 billion to keep its position as the default search provider for the Safari browser. Geoff Blaber, an analyst at CCS Insight, said a move to separate apps from the operating system may help foster competition over the longer term. But, he said, “Android has served its purpose in cementing Google services in consumers' minds. Even if devices are shipped without these apps, users will seek them out."
So the most obvious answer to “what happens now?” is, “probably not a lot.” This decision was a long time coming, so Google had a big window to prepare —it even tried to settle early— and will file a well-considered appeal before the October deadline. If the lucrative home-screen real estate goes to the highest bidder, it’s unlikely anybody will outbid the Alphabet-owned giant. And if they did, everyone’s so used to using Google’s apps by this point they’ll just change the default themselves anyway.
Maybe that’s why the company’s investors aren’t worried —it’s just business as usual.
And here’s what you need to know in global technology news
U.S.-China trade tensions are starting hit consumer electronics. One company, which designs earbuds, headphones and speakers in the U.S. and manufactures them in China, is already feeling the pain.
A vote of confidence. Dan Loeb’s Third Point has taken a stake in the payments company, saying that it has revenue opportunities from its Venmo platform, dynamic pricing and offline payments.
Rocket Internet eyes more U.S. investments. The European company that creates and invests in tech startups is working to raise a new billion-dollar fund, a significant amount of which will eventually be invested in the U.S.
Billion-dollar bonuses? CEOs of Chinese companies going public are getting 10-figure payouts, no strings attached.
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