European Commissioner for Competition, Margrethe Vestager speaks during the Web Summit.
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Around the world governments are increasingly discussing how best to regulate big tech companies, but one woman — EU Competition Commissioner Margrethe Vestager — is already showing them how it’s done.
This year Europe’s Competition Commission hit Google with the second of two huge antitrust fines for promoting its own interests and stifling opportunities for rivals to innovate, grow and challenge its dominance, with a third expected to arrive next year.
It’s not Google’s dominance that Vestager has a problem with, she explained while speaking at Web Summit in Lisbon on Wednesday. What she does take issue with is the idea that Google could be stifling consumers’ opportunities to make choices that are best from them, both now and in the future.
“For many years Google has been one of our great innovators, but why would we put all hopes for the future in the hands of just one company?” she said. “No matter how much Google has done — helping us navigate the web, or making Android as an operating system open source — we cannot look away when it threatens to lock down competition.”
Vestager added that if Google doesn’t allow rival companies to thrive and compete with it on Android, this negates the benefits of having an open-source ecosystem in the first place.
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Could a big fine make for better phones?
In a press conference following her speech, Vestager expanded on the impact of this year’s antitrust decision that is forcing Google to pay a fine of $5 billion, and make changes to its agreements with manufacturers of Android phones about how its apps and services are bundled on devices.
It’s possible, according to documents leaked to the Verge last month, that phone manufacturers might have to pay as much as $40 per phone to license Google’s apps and its Play Store under the new agreements. Some are worried that this cost could be passed on to consumers.
Vestager didn’t seem too concerned at this stage about the impact on consumers. Following the antitrust decision, Google cannot just “put something into place that has the equivalent effect,” she said. It’s possible that manufacturers will instead receive payment from Google’s rivals for bundling their own apps and services, so the cost may net out.
“It it for Google themselves to decide what specific steps they will take to live up to the decision, and that of course is very important because it’s their business,” she said. But, she added: “We will be looking into this and monitoring this for quite some time still to come.”
Later in the day Google’s Europe chief Matt Brittin took the stage and said that while the company is appealing the EU’s decision, it is prepared to pay the fine for Android if that is what the law stipulates. In order to avoid similar situations in future, he said, it will be important for Google to be more actively involved in the conversation about creating rules to govern the digital world.
Vestager expressed optimism that overall, the ruling would open the market up, paving the way to improve Android phones for consumers. “Those who produce phones can give us a renewed out-of-the-box experience,” she said. “This is why it is important for us to give phone manufacturers the opportunity to provide something new and attractive for consumers.”
Already the Commission is learning about alternative app stores to Google’s own Play Store, she said, and she plans to issue an update in the coming months about how the market is developing.
As if to provide examples of how the Commission doesn’t always come down hard on US tech giants, Vestager also mentioned the investigations into two mergers — Apple and Shazam, and Microsoft and LinkedIn — both of which it decided did not violate European competition law. “I do hope you see that nothing is stopping you coming together as businesses and creating pools of data that allow you to innovate,” she said.
But, she added, the fact that these mergers went ahead without an issue doesn’t mean the Commission is no longer watching for problems. “On the contrary we will keep focusing, keep analysing, keep keeping an eye,” she said.
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