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Alphabet GOOGL.O unit
Google on Monday blasted EU antitrust regulators for ignoring rival Apple AAPL.O as
it launched a bid to get Europe's second-highest court to annul a record
4.34-billion euro ($5.1 billion) fine related to its Android operating system.
Far
from holding back rivals and harming users, Android has been a massive success
story of competition at work, representatives of Google told a panel of five
judges at the General Court at the start of a five-day hearing.
The
European Commission fined Google in 2018, saying that it had used Android since
2011 to thwart rivals and cement its dominance in a general internet search.
Regardless
of how the court rules, Google, Apple, Amazon, and Facebook will have to change
their business models in the coming years to ensure a level playing field for
rivals following tough new rules proposed by European Union antitrust chief
Margrethe Vestager.
"The
Commission shut its eyes to the real competitive dynamic in this industry, that
between Apple and Android," Google's lawyer Meredith Pickford told the
court.
"By
defining markets too narrowly and downplaying the potent constraint imposed by
the highly powerful Apple, the Commission has mistakenly found Google to be
dominant in mobile operating systems and app stores when it was, in fact, a
vigorous market disrupter," he said.
Pickford
said Android "is an exceptional success story of the power of competition
in action".
Commission
lawyer Nicholas Khan dismissed Apple's role because of its small market share
compared with Android.
"Bringing
Apple into the picture doesn't change things very much. Google and Apple pursue
different models," he told the court.
Khan
cited Google's agreements which forced phone manufacturers to pre-install
Google Search, the Chrome browser, and the Google Play app store on their
Android devices, and payments to pre-install only Google Search as conduct that
did not allow for competition.
He
said Google's dominance as an incumbent and the immense barriers for rivals
resulted in "a virtuous circle for Google but a vicious circle for anybody
else".
Android,
free for device makers to use, is found on about 80% of the world's
smartphones. The case is the most important of the European Union's three cases
against Google because of Android's market power. Google has racked up more
than 8 billion euros in EU antitrust fines in the last decade.
German
phone maker Gigaset Communications GmbH, which is backing Google, said its
success as a European smartphone maker was due to Android's open platform and
lamented the negative impact of the Commission's decision on its business.
"The
license fee for the Play Store that Google now charges as a result of the
contested decision represents a significant portion of the price of Gigaset's
smartphones aimed at price-sensitive consumers," its lawyer Jean-François
Bellis told the court.
Lobbying
group FairSearch, whose complaint triggered the Commission case, was however
scathing about Google's tactics with phone makers.
"Google
adopted a classic bait and switch strategy. It hooked (them) on a supposedly
free and open-source operating system subsidized by its search monopoly, only
to shut that system to competition through the web of restrictions at issue in
this case," its lawyer Thomas Vinje told the court.
