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Have you heard of GAFA? This acronym stands for the four possibly most powerful US companies: Google, Apple, Facebook and Amazon. Each has taken their fair share of the Internet pie (along with Microsoft) and make billions almost unchallenged. But recently, a storm has been brewing in paradise: Google was fined 4.3 billion euros by the EU commission. What happened?
Google's Android offers a huge advantage: It's free and customizable, an enticing offer for any cellphone manufacturer. After all, for each company to create their own OS wouldn't make economic sense. Naturally, Google, who recently abandoned their slogan "Don't be evil", don't just give away Android for free out of the kindness of their hearts. They have steep requirements. For instance, if you wanted to use Google Playstore with your product, you'd also have to pre-install other Google apps like Chrome and set up Google Search as the default search engine throughout your device. The list includes a total of 11 apps that cannot be removed by users (only disabled). In addition, Google also paid manufacturers to integrate Google Search into their products. This, although a welcome secondary income for manufacturers, was now deemed illegal by the EU commission. The third charge is more technical. Since Android is open-source (meaning anyone can view and modify the source code), manufacturers are free to ship customized versions of the OS. These tend to look sleeker, come with handy additional functions and often prove to be standout features for prospective buyers. However, Google stipulated that, if you ship a custom Android OS, you can no longer sell cellphones with a vanilla Android.
It's this kind of adhesion contract that drives competition regulators up the wall and now led to a billion euro fine. As with Microsoft, who tried to force Internet Explorer and Bing down users' throats in the past, regulators now sprung into action once more. Biggest drawback: It takes time! That's why fines are often imposed for misdemeanors that occurred several years ago. Of course, Google has already lined up their army of lawyers to fight the decision. It could very well take another couple of years until the final word has been spoken. The message sent to GAFA companies (and others, as Microsoft and Intel can attest to) is clear: We're watching you and you don't have a free pass - or else you'll pay dearly. And there's more trouble brewing for Google! Withing 90 days, the company has to change their current practice or face additional hefty fines. These news are important in a time when people like Mark Zuckerberg leisurely handle congressional hearings like a rock star.
Brussels: Currently not Google's favorite city
This fine may set a new record but it's not the first of its kind. Back in June 2017, the EU struck again, fining Google 2.42 billion euros. Back then, Google gave their own ads better rankings in their Google Shopping store even when competitors had better offers. If you were looking for an item, you'd have to skip all the way to page four of the search results to see ads from competitors. Since 95% of clicks happen on the first page, they simply buried the competition, harming consumers and the free market in the process. It soon became apparent that fines are set based on company turnover to really hurt! It's important to note that nationality plays no role here, even though this aspect is frequently cause for fierce debates. It's actions that matter. Companies that violate the law and harm the interests of competitors or consumers deserve to be punished even when they are operating out of Atlantis!
Though it is estimated that Google has 90 billion in their bank account, the company will definitely feel this one. If the EU prevails, Google will have to allow for more competition, will no longer be able to pay manufacturers to install their apps and will be forced to allow cellphone makers more latitude in their use of Android, including customizations. This will likely hurt a lot more than the fine alone! However big Google, Facebook and others may be, once governments curtail their business models, profits may dwindle fairly quickly. For instance, if you restricted Facebook's data collection activities, their wet dream of 100% transparent user profiles for targeted ads would quickly come to an end. That's were politics come into play. Big IT has aggravated governments from various countries for years by making huge profits while paying few taxes in their places of origin. Interesting side note: Estimates show the frequently bemoaned trade deficit between the US and the EU is non-existent if you include services provided by big IT. And while the idea that goods can be digital may not have taken roots everywhere yet, at Ashampoo, we're all too aware of this fact (we'd be in deep water otherwise). Word just hasn't reached politicians yet.
So administrations are fighting against monopolies to protect consumers. As much as people (including me) enjoy nagging politicians, users need freedom of choice. Because competition is good for business, because we need manipulation-free search results to find the best offers or the most relevant news articles and because we want to use the best apps, not the apps that are in the best interest of a single company. Wouldn't it be great if we could just uninstall the apps we dislike? Or how about freedom to choose between an ample number of browsers and search engines right from the start? How many would rather use Opera along with the anonymous DuckDuckGo engine than rely on pre-installed software? It would definitely lead to more software diversity on cellphones around the globe - and that is a good thing!
What I would like to know: Do you support efforts to put business giants into their places or do you consider this struggle a lost cause?
I'm slightly puzzled by Google's third requirement that a manufacturer can't sell both a customized and vanilla version of Android.
How do they benefit by that?
I see Input therefore I impute ...yes it would make a good film script where are the limits of power and presentation. What do we know ..... Are we being involved in this excersize just to present us with another excerpt programmed to present the false reality which safeguards vested interests ...distrations abound ....
Tbese b8g four with their deep pockets have been buying up potential competetors before these csn blossom with better performance and presence.
This makes the penalty more like a pinch! A monopoly once too b8g get harder to tame.
The similar effect was observed with big supermarkets gobbling up smaller players or running down the friendly small retailers.
The benefit to consumers is very much short term and illusiory when overall econmic dynamics are seen.
Yes we are doomed to manipulations and exploitation in the name of consumer choices! It is all about brave new world that is already upon us.
I have to answer yes, and yes, to the question at the end of the article.
These companies know that one day the brown stuff will hit the fan so they always have a backup plan or two. The bigger problem is the gullible consumers who support them.
I have never used Amazon. Or Apple and Google products (excluding Android on my phone) - Firefox and Startpage has served me well. And I deactivated my Facebook account. Guess what? My computer/internet life has not come to an end...
Also, the mobile phone manufacturers can get together and produce an alternative Linux-based OS to Android. But that's not going to happen.
Hi Rodger Sparks,
Free with Google, or any of the others is a no-no.
Every move they make is for their own benefit and Money.
Google make $$$$$billions from advertising, updates, free apps from the app creator to put ads on the app goes to Google on an Android cell-'phone, the same with Apple.
Facebook with Google ads and every person who logs in with a click, that 'click' was $4.60 to Google at the last check.
Read 'Apple' doing the same thing when billions of iPhone users click on Google for web searching.
Mozilla Firefox, until recently on had Google as a server, now there is a choice but Google is most-used, but even DuckDuck Go browser uses Google ... again, ever 'click' is $$ for Google.
Amazon, note the arrow on their logo ... A >>>>>Z, everything from A to Z fingers in the Money Pie.
Look on web sites, advertising by Google look closely at the top left of the ad, tiny blue circle and blue cross,,,,hardly noticeable to many, but click on the blue cross, Report This Ad......click on that and click on any of the four choices which are shown.
"We'll Try Not To Show That Again" in quiet 'visual', but leave the page and then return, the same ad Hits Your Eyes".
It's worse that a charity collector around the shops waving a slotted tin in front of you.
In the Olde Wilde West there were medicine salesmen selling a cure-all health medicine, snake-oil salesmen.... that is what the GAFA con-men are doing.
I never, Jump On Line to find any business, company, service or otherwise who yell, "Find Us On Facebook".
Grossen dummkopf who believe in GAFA and the rest of the rats in the pack.
I have never understood why Google don't make two versions of Android available. One - free of charge - has all of the constraints, requirements and restrictions of the current version. The other - paid for by the customer - is free from the imperative to have other Google apps installed... or at least allows them to be uninstalled. Would this not satisfy the EU's competition authorities without affecting Google's bottom line?
The requirement to have all of the various Google apps installed along with Android is not only anti-competitive, it also pushes up the price of your smartphone/tablet by making it necessary to have more storage in your device.
Incidentally, you can still use DuckDuckGo on your Android device by downloading their app.
Hi Sven,
Thank you for the complete explanation of GAFA.
I look upon each one of the company's owners as ein Bösewicht, ein Shurke. und eine schweinehund.
My correct description of those abnormal 'human beings' who set themselves up as demi-gods.
All the bosses and visionairies strike me as fairly devoid of humanity. They have great ideas for their products but very few for mankind. Of course, this is to be expected from good capitalists but I'm missing a soul in all of this.
where does the money go?
I think your title, "4,342,685 reasons for Google to change" is premised on the 4.3 billion Euro fine slapped on Google by the EU Commission. If that is the case, then you may want to revisit the title as it is missing a few zeroes.
You're absolutely right! The title has been changed accordingly.
Absolutely business giants must be kept in place as unchecked they are immoral entities that seek only money at any cost - All evil needs to triumph is for good people to do nothing.
I say stop the big 4 getting there own way
Sometimes it seems to be case of 'blowing' in the wind when these large companies continue to digitally rape the public. Here, in Australia, they still get away with paying no or very little tax. The politicians seem shy away from confronting them, which leads one to think that 'someone' has their hand in 'another's' pocket, or am I too cynical? USA rules!
At a visceral level I quite agree, and governments in a number of countries are now looking for ways to get back tax revenue that should rightly be paid by the likes of Google, Apple, Amazon etc. Like many people, I strongly resent having software that I don't want or need foisted on me when I purchase a tablet or smartphone, or use Windows, and being prevented from removing it justs adds insult to injury.
However, perhaps we need to be a bit careful about what we wish for. When you use gmail or Google Search, or get an Android update, these things are free in the sense that they do not take money from your bank account or credit card to pay for them. I don't think we would be very happy to have to pay for every email we send or every time we searched the internet. The reason we get them for nothing is that Google et al. have found other ways of extracting our money and we have discovered that what we save financially we pay for in irritating and intrusive behaviour from the devices we find so useful.
I don't know what the answer is, but if it is found I hope that it is not worse than the problem.
Makes you think.