Google defends Android phone makers’ deals, denies carrot and stick tactics

  • Google says the deals boosted competition
  • EU regulators say Google actions have gone beyond necessary
  • The case is the most important of three EU decisions against Google

LUXEMBOURG, September 28 (Reuters) – Google’s Alphabet Unit (GOOGL.O) said on Tuesday that deals with Android phone makers that had earned it a record fine of € 4.3 billion (5 billion) had spurred competition and dismissed EU accusations that they were a tactical carrot-and-stick that stifled rivals.

Google was addressing the second day of a week-long hearing as it tried to get Europe’s second highest court to overturn the fine and a European Commission order binding it to loosen its grip on search engines on Android devices.

Google lawyers and the EU’s chief competition officer clashed over the company’s Mobile Application Distribution Agreements (MADAs) that require phone manufacturers (OEMs) to preinstall the Google Search app and the Chrome browser app in exchange for a free license from Google Play.

“This licensing model is what attracted OEMs to the Android platform, and what enabled these OEMs to deliver a consistent, high-quality user experience at the lowest possible price,” said the Google lawyer Alfonso Lamadrid at the Tribunal.

“People use Google because they want to, not because they have to,” he said.

Commission lawyer Carlos Urraca Caviedes dismissed the argument, calling the deals and other restrictions Google’s carrot-and-stick policy towards phone makers.

“This helped Google ensure that its competitors did not reach a critical mass to challenge its dominance,” he told the court.

He also said such transactions were unnecessary given the market power of Google, the world’s most popular internet search engine, and its large number of users.

Urraca Caviedes said what Google has done “goes beyond what is necessary to develop and maintain the Android platform”.

A verdict could fall next year. The case is T-604/18 Google v European Commission.

($ 1 = € 0.8537)

Reporting by Foo Yun Chee; edited by Barbara Lewis

Our Standards: Thomson Reuters Trust Principles.

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