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Google's Android Bundle Moves Further Into Antitrust Crosshairs

The FTC could follow its European counterparts in an Android case, but it seems unlikely.


For years now, the scourge of companies that make mobile services that compete with Google has been the Google bundle. Starting last year, Google began tightening the terms of this bundle — the requirement that phone makers using its Android software pre-install and prominently display Google’s services — in a bid for more control of the free operating system.

Google’s rivals have had little luck convincing phone manufacturers to shake off the bundle. But they’ve gained some traction with regulators, especially those abroad. The European Union launched a probe into the Android bundle in April. Russia’s competition agency ruled earlier this month that Google’s bundle broke the law.

And now U.S. regulators may weigh in. The Federal Trade Commission has heard similar complaints on Android bundling and received the sign-off from the Department of Justice to pursue a case, according to people familiar with the matter.

Bloomberg first reported the news. Both Google and the FTC declined to comment.

There’s no guarantee an actual case will emerge. The FTC opens many investigations, but few mature to formal suits. The agency has yet to reach out to Google, a necessary step in a formal investigation, according to a person familiar with the company. And the agency looked into Google’s behavior on mobile devices for signs of antitrust violations two years ago and deemed the case flimsy, reaching an agreement with the search giant.

But that case was primarily about patent issues with Motorola, which Google took on with its acquisition, and desktop and mobile deals that rivals said favored it in search, not the full Android bundle, which includes YouTube, Gmail and the Play Store.

Also, the FTC has faced political heat for its handling of the bigger Google antitrust case, in 2012 — with evidence that the agency had rejected staff recommendations to pursue a case. (The FTC denied that.) One person familiar with the agency said it has multiple lawyers and economists poking around on a potential Android case.

FairSearch, an advocacy group close to Microsoft and involved in the current EU antitrust cases, praised the potential move. “Google has used a range of anticompetitive tactics, carrying on a troubling pattern of conduct that has made it more difficult and expensive for fresh, innovative companies to reach the market,” it said in a statement.

Other antitrust analysts noted that Google’s arrangements with phone makers don’t curtail the choices of smartphone owners — they’re still free to download other apps on Android, or buy an iPhone. In February, a federal judge shot down a civil case claiming that Google’s Android bundle brought consumer harm. Regulators in the EU, where Google is fighting back against a suit around its shopping product, are more concerned with threats to business competition, whereas those in the U.S. are more mindful of monopolistic threats to consumers.

“Competitors can complain, but the FTC only goes forward and conducts a significant investigation if they find evidence of consumer harm,” said David Balto, an antitrust lawyer and former deputy director for policy at the FTC. “I don’t think there’s evidence that this exists now.”

Google maintains that it isn’t hurting competition since device makers can include rival apps as well. Hiroshi Lockheimer, Android’s top engineer, wrote as much in the company’s response to the EU probe. However, Google does require that OEMs that want the Play Store or YouTube or any of its apps include them as a package and guarantee certain placement on the devices’ home screens.

Additional reporting by Ina Fried.

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