Google probe: Is now the time to regulate mobile search?

Google probe: Is now the time to regulate mobile search?

Summary: The European Commission has reportedly told Google that any settlement of its antitrust case must involve changes to its mobile services. But both parties in these negotiations have to tread very carefully indeed.

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TOPICS: Google, EU
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According to a report in the reputable Financial Times, antitrust regulators in the EU have added an extra condition to any settlement of the Google anti-competition case: that the web giant apply any settlement deal to mobile services as well as those on the desktop.

Google search
The European Commission has reportedly told Google that any settlement of its antitrust case must involve changes to its mobile services. Image credit: Annette Shaff/Shutterstock.com

The move must come as an unwelcome jolt to Google, which is desperately trying to stave off formal charges — the point at which such things move into 'big fine' territory. While competition commissioner Joaquín Almunia has repeatedly said he would prefer to avoid taking that step, his reported request for non-confidential versions of the evidence already submitted by Google suggests he is drawing up charges.

This represents a critical moment for both regulators and the tech industry, largely because the industry is in the process of going mobile. Competition authorities have to look at the current situation and weigh up whether it is appropriate or too early to regulate a space that is hugely in flux.

Desktop vs mobile

Before looking further into this, let's remind ourselves of what Google stands accused of in this probe. According to complainants led by Microsoft, Google blocked its advertising partners from also using rival platforms, made it difficult for those advertisers to port their campaigns to other platforms, copied content from competing search engines and downgraded those search engines in its own Google Search results.

We don't know the precise nature of the settlement Google and the Commission are trying to thrash out, but we can fairly assume that it involves not doing any of the things Google has been accused of.

It's up to the Commission to establish whether or not Google actually does those things on the desktop (if charges are being drawn up, that would suggest there's evidence to support this), but also whether it does them on smartphones and tablet. But here's the tricky bit: if Google does unfairly hobble its rivals on mobile, would it be right for regulators to stop it from doing so?

First, let's look at Google's market position. According to StatCounter, Google has 92 percent of the desktop search market and 97 percent of the mobile search market. There is no question that, on both platforms, Google has what competition regulators call 'significant market power'. The very point of antitrust regulation is to stop companies that are in such a dominant position from abusing their dominance.

But even then, there is an argument for saying the regulators may want to lay off the mobile angle.

If we look back less than two years to the US FCC's net neutrality regulations, we can see a prime example of mobile being treated differently from the fixed space — the rules stated that fixed networks had to avoid discrimination between different content, but mobile networks were under no such limitation. This followed a suggestion that had been made by Google and Verizon, and it basically held that wireless networks should not be heavily regulated yet because their industry is too young.

Guessing the future

However, there is reason to believe that the European Commission thinks differently. This week it emerged that EU regulators are now on Microsoft's case over its refusal to allow any browser but IE onto its Windows RT platform. That's a weird one, because it's Windows — a notoriously dominant platform on the desktop — but it's also mobile, because Windows RT is designed for ARM-based tablets.

Until we see which way Windows 8 goes in the tablet space, it is very difficult to see it as dominant. Surface and other Windows 8 tablets would have to outsell a lot of iPads and Android tablets to get to that position — which could happen, if people think Windows first and device type second, but right now it's a speculation game.

Similarly, it could be argued that mobile search is not a done deal.

Maybe, in a fit of pique at its main mobile rival, Apple decides to take on Bing or Yahoo as its default search engine, rather than Google Search. Maybe Facebook makes a serious search play — after all, browsers and apps are still battling it out for smartphone and tablet users' attention. Android is still only neck-and-neck with iOS (about 25 percent each) when it comes to the installed mobile OS market. If such catastrophes hit it, Google may be unable to stop a very swift erosion of its market position.

So this is the dilemma faced by the EU's competition authorities, and by Google. The regulators have to judge whether today's clear-cut market dominance will hold if they do not deal with it now, and Google has to judge how hard it wants to plead industry infancy, given the massive fine that could await it on the other side if it fails.

Both parties need to tread carefully. What happens now could affect the whole mobile industry.

Topics: Google, EU

David Meyer

About David Meyer

David Meyer is a freelance technology journalist. He fell into journalism when he realised his musical career wouldn't pay the bills. David's main focus is on communications, as well as internet technologies, regulation and mobile devices.

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Talkback

14 comments
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  • Mobile vs. Fixed

    A sillly argument. Treat it simply as access.
    NoAxToGrind
  • Good Read

    Thanks for the insight.
    SmoothDouglas
  • Very different and a very poor analogy. The net neutrality issue came down

    to bandwidth, which is very different between fixed and mobile. What googles doing is just bad business practices. It's become really apparent that they are being out innovated by bing and are scared to death of it. They've tried copying it, theyve tried stiff arming advertisers away from it. It used to be that bing was just better organized and layed out better for typical scenario usability. But now that bing has objectively surpassed them at their core functionality, search result relevency, they have gone into premature desperation mode. So yes absolutely the EU should slap some integrity into them.
    Johnny Vegas
  • Well... it's business,and it is tough to compete with the gorilla

    Google is ubiquitous. It is because it has innovated and provided results that the end user likes. The market loves Google. If you had market dominance why would you want to encourage competition? Good competition is good for most given markets, but it is up to the competitor to fight for position. The EU is, again, looking hard at the prospect of making a crapload of money off of a gigantic business. Microsoft, now Google, threatened and fined by the Extortionist Union.
    notme403@...
    • It's call antitrust

      "If you had market dominance why would you want to encourage competition?"

      Exactly. Obviously, Google is going to try to choke off the competition any way possible to maintain diminance.

      That's why we need antitrust laws.
      illegaloperation
    • Re; Microsoft, now Google, threatened and fined by the Extortionist Union.

      @403 (forbidden) (No access to clear thinking ?)

      Microsoft has been fined because they broke the law !

      Google is so far fully co-operating in discussions with the EC's competition committee.

      The only REASON they were called in was a complaint about Google from Microsoft.
      You did not get that part, did you ?

      Even though MS was found guilty of foul play, they still have the right to demand that the EC scrutinize Google, as the rules are the same to any company with a very dominant position.
      hkommedal
  • So, will Windows 8 come with Safari?

    Just sayin'... EU commands browser choices be offered by MS. Maybe Google.com will have a home page that offers Ask.com searches after the Extortionist Union is through...
    notme403@...
    • Re; . . . offers Ask.com searches after the . . .

      @403 forbidden
      It seems you do not get it.

      The EC's competition commitee responds to COMPLAINTS from competitors.

      Whenever a competitors deliver a complaint, this commitee HAS to respond to their demands.
      They are not allowed to treat ANY complaining company differently.

      Do you see it now ?
      hkommedal
  • Now is the time to understand that one hand and one ear helps mobile you

    Way too early to mandate what an artificially intelligent handheld device can be.
    Half a century of artificial intelligence research is starting to come together:
    1) Voice recognition of your voice while walking on a busy sidewalk
    2) Face recognition of your acquaintances inside or outside buildings
    3) Recognition of body language (so much for used car salesmen)
    4) Knowledge based search coordinated with collaborative editing

    Tiny devices are now gateways to all the worlds knowledge, books, videos, content that you yourself generate are becoming accessible to you at a much lower cost to you.

    Wonder blunders by regulators could add 10 years to commercializing the ready to use features of artificially enhanced human intelligence (yours). The time for this enhancement is Google Now!
    jnffarrell
  • This site is getting more and more hopeless.

    It behaves ok if I am NOT logged in.

    If I AM logged in, it throws fits left, right and center if I try to cast a vote.
    hkommedal
  • google

    shut down google for good that will make it safe again
    ttx19
    • Re; shut down google for good that will make it safe again.

      That is a rather silly remark.

      The EC's jurisdiction covers only the EU and the EEA (associated countries in Europe).

      Did you believe that the EC rules the entire world ?
      hkommedal
  • Riciprocity Now, or How do you like them Apples.

    Now is the time for ALL OSs, Browsers, Search Engines, Social Apps to have options for at least alternative, and at most dual variants. Given up to 3**4 possibilities on every device competition among the 81 combos is assured. MS may not like it, nor will Apple, but their snarky/cowardly patent behavior forced the EUs hand. So the EUROPEAN regulators have asked Google to negotiate on behalf of their competition.
    jnffarrell
  • Adobe study finds no correlation between Android OS and Google use

    A recent study from Adobe indicates that there is no correlation between Android OS driven visits and Google Mobile Search usage in the Asia-Pacific region. The same study also quotes mobile versus PC search usage and does show that Google does better on search market share on mobile versus PC in all 11 countries. It does appear that Google gets a lift on mobile phones, but not because of Android.

    Read the study here (no form, no fee): http://adobe.ly/R5nOQa
    Tamara Gaffney