Google: Paying Phone Makers Helped Android Compete With Apple

Paying phone makers to install only Google search on their devices was a way to help Android compete with Apple, Google told a European court in an attempt to have a multi-billion-dollar antitrust ruling overturned.

As Reuters reported on Wednesday (Sept. 29.), Google made this argument to the EU’s General Court during the third day of a week-long hearing aimed at getting the judges to dismiss a record $3.7 billion antitrust fine from the EU. The tech giant also hopes to overturn a European Commission order for Google to relax its grip on the search function on Android devices.

The EU’s competition watchdog has taken action against revenue-sharing arrangements (RSAs), in which Google pays phone makers to only pre-install its search engine on devices, arguing that it shuts out the company’s rivals.

But Google lawyer Assimakis Komninos told the court the payments were simply intended to encourage manufacturers, who are already getting money from other apps, to give Android a chance.

“Google had to offer an offsetting revenue stream,” he said, as an incentive to convince them to open up and adopt the Android platform. At the same time, the RSAs also helped them to keep prices down and compete more successfully with Apple.

Komninos added: “And obviously, Google was getting in return a promotional opportunity, sole preinstallation, which allowed it to invest in a free OS (operating system), a free app store and so on.” In addition, the RSAs covered only 5% of the market, the attorney said.

Commission attorney Nicholas Khan rejected Google’s claim. “What concerned them was competitors gaining traction,” he said, and the fact that the payments were “the pinnacle of Google’s interlocking practices.”

Read more: Google Flexed Its ‘Financial Muscle’ in India, Antitrust Report Says

This hearing came a little more than a week after regulators in India accused Google of purposely cutting down on the ability of device manufacturers to create and market devices operating alternative versions of Android.

That charge, leveled in a report by the Competition Commission of India, is one of a series of antitrust accusations against Google in that country, along with antitrust probes in the U.S. and EU. A verdict is the EU case likely to come next year, Reuters said.