Google faces complaint to European regulator over 'predatory pricing'

Fairsearch Europe, a group including rivals Microsoft, claims Android operating system is 'deceptive way' to dominate market

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Google faces a complaint to the European regulator by a group including rivals Microsoft that Android is being used as a 'Trojan horse' to monopolise the market place. Photograph: Robert Galbraith/Reuters

Google's provision of its Android operating system for free is anti-competitive "predatory pricing", according to a complaint filed with European regulators by Fairsearch Europe, a group whose members include bitter rival Microsoft.

The group says Android is "a deceptive way to build advantages" which aims to "dominate the mobile marketplace and cement its control over consumer internet data for online advertising as usage shifts to mobile.

The complaint comes as the European commission's antitrust chief, Joaquín Almunia, continues an investigation into Google's dominance in search that has ground on for more than two years without any clear action. The EC competition group has raised four principal objections to Google's activities in Europe – normally a precursor to regulatory action.

The Guardian understands that Almunia's team has also been considering whether to include Android in any settlement with Google, but had not reached any definitive answer. Almunia declined to comment on Monday about the complaint but said that he would be receiving proposals this week from Google on how to settle the EC's objections.

Android-powered phones make up about 70% of those shipped in Europe at present, though a smaller amount of the installed base. Microsoft's Windows Phone makes up around 5%.

Predatory pricing complaints follow the provision by a company of a product at below cost in order to drive rivals out of the market. Only Google and Microsoft provide licensed mobile OSs; the other principal players, Apple and BlackBerry, do not license theirs. Nokia has ceased licensing its Symbian operating system.

In the Fairsearch complaint, Thomas Vinje, a lawyer acting for the group, says: "Google is using its Android mobile operating system as a 'Trojan horse' to deceive partners, monopolise the mobile marketplace, and control consumer data. We are asking the commission to move quickly and decisively to protect competition and innovation in this critical market. Failure to act will only embolden Google to repeat its desktop abuses of dominance as consumers increasingly turn to a mobile platform dominated by Google's Android operating system."

A Google spokesman responded: "We continue to work co-operatively with the European commission."

Fairsearch Europe includes 17 companies, including Microsoft, Expedia, Nokia, Oracle and TripAdvisor – all rivals in some way to Google's position, or who have seen their positions eroded by its growth.

Google provides Android for free, undercutting Microsoft's paid-for Windows Phone mobile software that companies including Microsoft, HTC and Samsung use. To achieve "registration" with Google, the phonemaker must include Google apps, such as its Play store, YouTube video and Mail app. But that is not obligatory, and around a quarter of all Android-based phones shipped every quarter are not registered with Google; almost all of those are sold in China, where Google's search engine is not licensed by the government.

Handset makers who sign up to provide Google-approved apps face certain restrictions on how they can offer Android without Google services. In September 2012 it blocked Acer from offering a smartphone with China's Alibaba service on the basis that the OS being offered on the phone was an "incomplete" version of Android that would fragment the system.

Report by : Charles Arthur

Windows Phone challenging RIM for third place in Europe

Android and iOS still dominate the smartphone markets, sharing 93 percent of sales in the U.S. and 83 percent in Europe.

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Nokia's Lumia 900 is one of several new Windows Phones being introduced.

Microsoft's Windows Phone operating system is gaining on Research In Motion, a new study says, but it still has a long way to go before catching Android and iOS.

Windows Phone is vying with RIM for third place in Europe as low-end devices -- like the Nokia 610 -- drive sales in key markets such as Italy and France, according to a global smartphone sales report from Kantar Worldpanel ComTech.

But iOS and Android still make up the vast majority of sales in the region, sharing about 83 percent of the share in the big five European markets of Great Britain, Germany, France, Italy, and Spain, the report said. Their percentage is even higher in the U.S. at about 93 percent.

Google's Android operating system and Apple's iOS software have grabbed the lion's share of the smartphone market, but other players are vying to gain a piece as the smartphone market continues soaring. Microsoft has been pushing its Windows Phone operating system, but it hasn't gained much traction with users. However, that could change with the introduction of its revamped operating system later this month.

Dominic Sunnebo, Kantar global consumer insight director, said it's "highly likely" that Windows Phone will overtake RIM for the No. 3 spot in Europe before the end of the year due to "the momentum Windows 8 will bring towards the end of 2012."

Apple's iOS, Google's Android Jelly Bean and Microsoft's Windows Phone 8 are vying to be the top smartphone operating systems.

In the third quarter, Windows Phone had 5 percent market share in the five big European markets. A year ago, its share was 3.8 percent. RIM, by comparison, saw its market share drop to 6.4 percent from 12 percent in the year-earlier period.

In the U.S., Windows Phone was 2.7 percent of the market, while RIM was 1.7 percent.

Android, meanwhile, saw the biggest jump in Europe in the period, with its hold on the region soaring 20 percent to 69 percent. iOS slid 4.3 percent. In the U.S., Android retained the top position with 60 percemt of sales, with iOS following at 34 percent. However, Android's percentage was down 3.3 percent from the previous year while iOS climbed 9 percent.

Report by: Shara Tibken