Print 33 comment(s) - last by Tony Swash.. on Aug 12 at 3:40 AM

Google stands accused of using its Android smart phone market giant to crush the competition.  (Source: AP Photo)
Is Google abusing its dominant position to proselytize its services?

The world's most popular smartphone operating system, Google Inc.'s (GOOG) Android OS, can't seem to catch a break these days.  If its not being attacked in court [1][2][3][4][5by rival smartphone maker Apple, Inc. (AAPL) whose looking to forcibly remove its products from market [1][2] with lawsuits, it's being probed by antitrust investigators.

The U.S. Federal Trade Commission on Wednesday issued long awaited subpoenas.  For those of you who aren't lawyers and haven't been dragged through a major court case, a "subpoena" is a government demand for testimony or evidence.  Failure to give the requested information can result in criminal and/or civil penalties.

The fact that the U.S. government has issued subpoenas shows that it's getting serious about its investigation of Google.  A Google spokeswoman seemed nonchalant, commenting, "We understand that with success comes scrutiny. We're happy to answer any questions they have about our business."

But for all the cheer, the move is a major concern for Google.

Several small smartphone service providers have claimed that Google applied pressure to its hardware partners to boot their products off their smartphones, in favor of Google's rival services.  In and of itself, that might not be illegal were, Google not by far the industry's most dominant player in sales.  Android is reportedly outselling the next closest company, Apple, 5-to-2 in recent figures.  Thus if Google is found guilty of the allegations, it could face stiff penalties for violating antitrust laws.

Other allegations against Google include reports that it stole data from other services, such as reviews site Yelp and used it to bolster its own offerings.  And Google also stands of artificially boosting its services above competitors' in the results from its search engine -- the most used search engine on the planet.

The issue of the subpoenas was first reported by The Wall Street Journal.  Even if Google can beat the antitrust rap in the U.S. it faces similar accusations in Europe, a place known for its strict antitrust laws [1][2].  

Google has set aside $500M USD in cash to cover possible antitrust penalties.  The question is whether that will be close to enough.

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like Intel?
By 85 on 8/11/2011 8:07:47 AM , Rating: 2
So they allegedly did the same thing that Intel got busted for a few years ago? I'm really not a fan of business like this.

RE: like Intel?
By kleinma on 8/11/2011 9:20:12 AM , Rating: 2
You have to wonder how innocent a company can possibly be when they set aside half a billion dollars to cover potential costs. Sure smells a bit like guilt to me...

RE: like Intel?
By someguy123 on 8/11/2011 4:22:42 PM , Rating: 2
To be fair, lawyers are bloodsuckers and cost unbelievable amounts of money. Even if you're innocent you'll still need to pay for litigation, which is why most companies settle as quickly as possible on smaller claims to avoid paying out the nose for lawyers.

RE: like Intel?
By 2ManyOptions on 8/11/2011 9:30:47 AM , Rating: 3
Completely agree that any organization involved in unfair practice should be penalized. But I can't stop wondering when companies like Apple get patents on pretty much something which 'looks like a tablet'. Maybe it should fall under unfair patent or something.

RE: like Intel?
By ltcommanderdata on 8/11/2011 9:52:40 AM , Rating: 2
Are you saying that if the Patent Office grants Apple or other companies an "unfair patent", the recipient should be the one penalized? Rather than the Patent Office needing to review it's practices?

RE: like Intel?
By 2ManyOptions on 8/11/2011 11:13:36 AM , Rating: 2
Yeah, patent system/office is c ertainlythe one that needs scrutiny. Also, tells a thing or two about the company applying for patent. More than innovation patents seem to be filed for covering what is obvious that WILL be violated by any competitor in the course of bringing a similar product out.
I am not terming Apple products to be non-innovative, some of it's patents seem to be so.

RE: like Intel?
By michael2k on 8/11/2011 9:59:14 AM , Rating: 2
Patents can be reviewed and overturned. There's a process in place. Apple is, thus far, in the clear for enforcing the patents and IP it's been granted.

RE: like Intel?
By Samus on 8/11/2011 1:35:19 PM , Rating: 2
The difference is Intel had direct "compatible" competition: AMD.

Google's Android has no competition. Apple iOS is a closed system and is not licensed. Palm OS was licensed until it was replaced by WebOS, which like iOS, is not licensed beyond Palm (not HP) devices. Windows Mobile licensing fees were high and lets face it, offered a pretty crappy experience for most users.

a) open source
b) has no license agreement
c) free
d) modern
e) compatible with virtually all hardware

There is no other option that offers more than one of those features to manufactures.

HTC dumped Windows Mobile in favor of Android, but is not using Windows Phone 7. The same goes for Samsung, who before Android, depended on their own internal operating system development much like Motorola, LG, etc. Obviously Android was the most attractive alternative, because it was the only alternative.

This subpoena has Apple written all over it. There is no basis for it. There was no reason for Google to pressure their partners to use Android over the competition, because there is no competition.

I'm sure Google is as crooked as every other large company, but this is as frivilous as the Apple patent wars, and comparing Google strongarming to Intel strongarming is ridiculous and have virtually no comparison.

RE: like Intel?
By Samus on 8/11/2011 1:37:06 PM , Rating: 2
Replace all my 'not' with 'now'

Something happened with my spell check there...

RE: like Intel?
By NellyFromMA on 8/11/2011 2:51:38 PM , Rating: 2
It's a little bit more than simply the smartphone OS or device.... It's the inappropriate leveraging of their position as a whole ultimately.

RE: like Intel?
By someguy123 on 8/11/2011 4:28:50 PM , Rating: 2
It's freedom to be manipulated is more of a benefit of the GPL than part of google's marketing. regardless of its open nature, people are claiming that google demanded other OS's be removed from smaller phone manufacturer's product lines. even if the feature list isn't in direct competition to closed platforms, it's still in google's best interest to increase android saturation vs licensed OSs, as google makes money from the search/tracking on android devices.

RE: like Intel?
By michael2k on 8/11/2011 7:12:33 PM , Rating: 2
Did you miss this in the article?
"smartphone service providers"

So... AGPS, maps, search, music, movies, email... anything that would compete with Google, basically.

For example, Google more or less crushed Skyhook:

That would be a smartphone service provider that Google would probably face antitrust inquiries about.

RE: like Intel?
By superPC on 8/11/2011 9:52:27 AM , Rating: 2
this only proves that old adage: power corrupts absolute power corrupts absolutely. intel has tasted it, MS has tasted it, now it's google's turn and next facebook. one has to wonder though how can apple manages to stay away from this kind of scrutiny? i guess image really is everything nowadays (apple image as the perpetual underdog).

RE: like Intel?
By xype on 8/12/2011 2:53:25 AM , Rating: 2
Apple is making its own hardware and software. They can hardly force themselves to only sell Apple computers running Apple software, since they are doing so by design. Apple also isn’t forcing manufacturers to only manufacture their hardware or phone carriers to only carry iPhones. At best, they buy options for manfacturing capacities by giving the manufacturers huge piles of money in advances.

On the other hand, Apple is very agressive with their IP and is going to play the Patent System for all its worth. But that’s not really illegal, is it?

"Google fired a shot heard 'round the world, and now a second American company has answered the call to defend the rights of the Chinese people." -- Rep. Christopher H. Smith (R-N.J.)

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