Sun, Sep 27, 2015 page13

• FTC looking into claims against Google: sources

  ‘HOME-SCREEN ADVANTAGE’: Application developers say the bundling of the firm’s services on Android phones makes it all but impossible for them to compete

  • NY Times News Service, SAN FRANCISCO
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  Google Inc’s regulatory problems have stretched across the globe. Now, they are coming back home.

  The US Federal Trade Commission (FTC) has started investigating complaints that Google unfairly uses its Android mobile operating system to bolster popular products like Google Search and Google Maps, according to two people involved in the inquiry.

  These people, who spoke on the condition of anonymity, said the investigation was in a preliminary stage, meaning it could ultimately go nowhere.

  

  Google senior vice president of Android, Chrome and apps Sundar Pinchai speaks during his keynote address at the Google I/O developers conference in San Francisco on June 25 last year.

  Photo: Reuters

  Still, it is the latest in a growing number of antitrust problems facing the Internet giant.

  Android might seem like a strange target for an antitrust inquiry in the US. Google does not directly profit from the mobile operating software, which is installed on the vast majority of smartphones not made by Apple Inc.

  However, the inquiry is not really just about Android.

  Instead, regulators are looking at whether Google unfairly uses the software to promote its other dominant services, the people involved in the inquiry said.

  Smartphone makers are free to package Android with their own apps and services, but there is a catch: If they want to include any Google services, they have to take a bundle that includes the Google search engine, Gmail and Google Maps, which comes installed on the phone.

  In recent months, a number of mobile application makers have complained to the US Department of Justice that this requirement — the “home-screen advantage” — makes it all but impossible for them to compete in a world where people are spending less time on desktop computers and more time on mobile phones.

  In 2013, Internet companies including Microsoft Corp and Yelp Inc were incensed when the FTC — after a long investigation into whether Google used its search engine to unfairly favor its own products — unanimously voted not to bring antitrust charges.

  At the time, critics complained that the FTC investigated the wrong things and that its decision not to bring a case rested heavily on Google’s own logic.

  Those cries grew louder this year when the FTC inadvertently sent the Wall Street Journal part of a 2012 report from its agency of competition.

  In the report, staff members said the FTC should sue Google for some of its anti-competitive practices and raised concerns about how the company ranked competitors in its search engine.

  A few months ago, according to the two people involved in the investigation, the Justice Department asked the FTC for clearance to investigate the recent Android complaints — in essence, it asked the FTC for authorization to start making calls and taking meetings with Google’s opponents. Ultimately, the Justice Department and the FTC worked out an agreement for the FTC to take up the issue instead.

  The resulting inquiry is in a fact-finding stage, and the FTC has yet to contact Google, according to the people involved in the inquiry. However, the FTC agreement with the Justice Department suggests that the inquiry has accelerated and that the FTC is at least willing to dedicate staff members to the issue.

  “We welcome an investigation,” said Matt Reilly, legal counsel at FairSearch, a group of several Google competitors, including Microsoft.

  FairSearch has initiated antitrust cases against Google in the US and in Europe.

  “Once they dig into the evidence, we expect it will be clear that Google’s Android practices harm innovation and consumer choice,” Reilly said.
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