Technology

TechCrunch is heading to Latin America for the first time and staging its first ever Startup Battlefield Latin America on Nov. 8 in São Paulo to find the next wave of early stage startups tackling big ideas!

To spread the word, TechCrunchJon Shieber and Anna Escher will visit Buenos Aires and Santiago next week to meet with the startup community and hold meetups for anyone interested in learning more about the Startup Battlefield. They&ll also spend time explaining how to apply. Tickets to the meetups are free, but they will go fast so sign up now.

Here are the details:

Buenos Aires

Tuesday, July 24th, 7:00pm & 9:00pm

Innovation Lab Buenos Aires from Facebook @ Av. Cnel. Niceto Vega 4866, C1414BEF C1414BEF, Buenos Aires, Argentina

Register here.

Santiago

Thursday, July 27th, 5:00pm & 7:00pm

Startup Chile @ Monjitas 565, Santiago, Región Metropolitana, Chile

Register Here.

At the meetup, Founders will learn how to apply for Battlefield and investors will learn how to refer companies in their portfolio. TechCrunch will provide a brief presentation on Startup Battlefield and answer questions. Application close next month, and when they do, our editors will choose 15 companies to compete, and one will win $25,000 and a free trip to the next Disrupt SF. All the companies, however, will receive global exposure, winners or not, because video from their pitches on stage in front of top tier judges will be posted on TechCrunch.

(And in case you missed it, TechCrunch COO Ned Desmond is in São Paulo and Mexico City this week hosting meetups and briefings for TechCrunch Startup Battlefield Latin America.)

Startup Battlefield is the worldpremier startup launch competition. To date, the Startup Battlefield alumni community comprises almost 750 companies that have raised over $8 billion USD, and produced over 100 successful exits and IPOs.

Google has confirmed the expected, that it will indeed appeal the record $5 billion fine that it washanded today by European antitrust regulators forabusing the dominance of its Android operating system.

The European Commission announced that it is fining the U.S. firm for &three types of restrictions that [it] has imposed on Android device manufacturers and network operators to ensure that traffic on Android devices goes to the Google search engine.&

The press conference announcing the investigation, which has been eight years in the making, remains ongoing as of writing, but Google has already issued a short statement that confirms its intention to appeal.

&Android has created more choice for everyone, not less. A vibrant ecosystem, rapid innovation and lower prices are classic hallmarks of robust competition. We will appeal the Commissiondecision,& it said in a tweet.

We&re breaking out the specific details as we learn them in this post, but herethe core gist.

Competition commissioner Margrethe Vestager tweeteddetails of the penalty and explained more in an initial statement:

Today, mobile internet makes up more than half of global internet traffic. It has changed the lives of millions of Europeans. Our case is about three types of restrictions that Google has imposed onAndroiddevice manufacturers and network operators to ensure that traffic on Android devices goes to the Google search engine. In this way, Google has used Android as a vehicle to cement the dominance of its search engine. These practices have denied rivals the chance to innovate and compete on the merits. They have denied European consumers the benefits of effective competition in the important mobile sphere. This is illegal under EU antitrust rules.

In particular, theEC has decidedthat Google:

• Has required manufacturers to pre-install the Google Search app and browser app (Chrome), as a condition for licensing Googleapp store (the Play Store);
• Made payments to certain large manufacturers and mobile network operators on condition that they exclusively pre-installed the Google Search app on their devices
• And has prevented manufacturers wishing to pre-install Google apps from selling even a single smart mobile device running on alternative versions of Android that were not approved by Google (so-called &Android forks&).

The decision also concludes that Google is dominant in the markets forgeneral internet search service, licensable smart mobile operating systems, andapp stores for the Android mobile operating system.

Google has been fined a record breaking €4.34 billion (~$5BN) by European antitrust regulators for abusing the dominance of its Android mobile operating system.

Competition commissioner Margrethe Vestager has tweeted to confirm the penalty ahead of a press conference about to take place. Stay tuned for more details as we get them.

In a longer statement about the decision, Vestager said: &Today, mobile internet makes up more than half of global internet traffic. It has changed the lives of millions of Europeans. Our case is about three types of restrictions that Google has imposed on Android device manufacturers and network operators to ensure that traffic on Android devices goes to the Google search engine. In this way, Google has used Android as a vehicle to cement the dominance of its search engine. These practices have denied rivals the chance to innovate and compete on the merits. They have denied European consumers the benefits of effective competition in the important mobile sphere. This is illegal under EU antitrust rules.&

In particular, the EC has decided that Google:

• has required manufacturers to pre-install the Google Search app and browser app (Chrome), as a condition for licensing Googleapp store (the Play Store);
• made payments to certain large manufacturers and mobile network operators on condition that they exclusively pre-installed the Google Search app on their devices; and
• has prevented manufacturers wishing to pre-install Google apps from selling even a single smart mobile device running on alternative versions of Android that were not approved by Google (so-called &Android forks&).

The decision also concludes that Google is dominant in the markets forgeneral internet search services; licensable smart mobile operating systems; andapp stores for the Android mobile operating system.

Google has tweeted an initial reaction to the decision, claiming Android has created &a vibrant ecosystem, rapid innovation and lower prices&.

A company spokesperson also confirmed to us it will appeal the Commissiondecision.

This story is developing… refresh for updates…

The fine is the second major penalty for the ad tech giant for breaching EU competition rules in just over a year — and the highest ever issued by the Commission for abuse of a dominant market position.

In June 2017 Google was hit with a then-record€2.4BN (~$2.7BN) antitrust penaltyrelated to another of its products, search comparison service,Google Shopping. The company has since made changes to how it displays search results for products in Europe.

According to the blocrules, companies can be fined 10 per cent of their global revenue if they are deemed to have breached European competition law.

Googleparent entity Alphabet reported full year revenue of $110.9 billion in 2017. So the $5BN fine is around half of what the company could have been on the hook for if EU regulators had levied the maximum penalty possible.

The Commission said the size of the fine takes into account &the duration and gravity of the infringement&. It also specified it had been calculated on the basis of the value of Googlerevenue from search advertising services on Android devices in the European Economic Area (per its own guidelines on fines).

Google will have three months to pay the fine but is likely to appeal — and legal wrangling could drag the process out for many years. (Although if it does not pay the fine within that timeframe penalty payments of up to 5% of the average daily worldwide turnover of the company can be applied.)

Prior to the Commissionrecord pair of fines for Google products, its next highest antitrust penalty is a €1.06BN antitrust fine for chipmaker Intel all the way back in 2009.

Yetonly last yearEuropetop court ruled that the case against Intel — which focused on it offering rebates to high-volume buyers — should be sent back to a lower court to be re-examined, nearly a decade after the original antitrust decision. So Googlelawyers are likely to have a spring in their step going into this next European antitrust battle.

The latest EU fine for Android has been on the cards for more than two years, given the Commissionpreliminary findings and consistently prescriptive remarks from Vestager during the course of what has been a multi-year investigation process.

And, indeed, given multiple EU antitrust investigations into Google businesses and business practices (the EU has also been probing GoogleAdSense advertising service).

The Commissionprior finding that Google is a dominant company in Internet search — a judgement reached at the culmination of its Google Shopping investigation last year — is also important, makingthe final judgement in the Android case more likely because the status places the onus on Google not to abuse its dominant position in other markets, adjacent or otherwise.

Announcing the Google Shopping penality last summer, Vestager made a point of emphasizing that dominant companies &need to be more vigilant& — saying they have a &special responsibility&to ensure they are not in breach of antitrust rules, and also specifying this applies &in the market where itdominant& and &in any other market&. So that means — as here in the Android case — in mobile services too.

While a one-off financial penalty — even one that runs to so many billions of dollars — cannot cause lasting damage to a company as wealthy as Alphabet, of greater risk to its business are changes the regulators can require to how it operates Android which could have a sustained impact on Google if they end up reshaping the competitive landscape for mobile services.

At least thatthe Commissionintention: To reset what has been judged an unfair competitive advantage for Google via Android, and foster competitive innovation because rival products get a fairer chance to impress consumers.

However the popularity and profile of Google services suggests that even if Android users are offered a choice as a result of an EU antirust remedy — such as of which search engine, maps service, mobile browser or even app store to use — most will likely pick the Google-branded offering they&re most familiar with.

That said, an antitrust remedy could have the chance to shift consumers& habits over time — if, for instance, OEMs start offering Android devices that come preloaded with alternative mobile services, thereby raising the visibility of non-Google apps and services.

Interestingly, Google has been striking deals with Chinese OEMs in recent months — to brings its ARCore technology to markets where its core services are censored and its Play Store is restricted. And itsstrategy to workaround regional restrictions in China by working more closely with device makers may also be part of a plan to hedge against fresh regulatory restrictions being placed on Android elsewhere.

Although complainants in the EUearlier Google Shopping antitrust case continue to express displeasure with the outcome on that front. And in a statement responding to news that another EU antitrust penalty was incoming for Android, Shivaun Raff, CEO of Foundem, the lead complainant in Google Shopping case, said: &Fines make headlines. Effective remedies make a difference.&

So the devil will be in the detail of the remedies.

Android as an antitrust ‘Trojan horse&

The European Commission announced its formal in-depth probe of Android in April 2015, saying then that it was investigating complaints Google was &requiring and incentivizing& OEMs to exclusively install its own services on devices on Android devices, and also examining whether Google was hindering the ability of smartphone and tablet makers to use and develop other OS versions of Android (i.e. by forking the open source platform).

Rivals — banding together under the banner ‘FairSearch‘ —complained Google was essentially using the platform as a ‘Trojan horse& to unfairly dominate the mobile web. The lobby grouplisting on the EUtransparency registerdescribes its intent as promoting &innovation and choice across the Internet ecosystem by fostering and defending competition in online and mobile search within the European Union&, and names its member organizations as: Buscapé, Cepic, Foundem, Naspers, Nokia, Oracle, TripAdvisor and Yroo.

On average, Android has around a 70-75% smartphone marketshare across Europe. But in some European countries the OS accounts for an even higher proportion of usage. In Spain, for example, Android took an 86.1% marketshare as of March, according to market data collected byKantar Worldpanel.

In recent years Android has carved an even greater market share in some European countries, while GoogleInternet search product also has around a 90% share of the European market, and competition concerns about its mobile OS have been sounded for years.

Last year Google reached a $7.8M settlement with Russian antitrust authorities over Android — which required the company to no longer demand exclusivity of its applications on Android devices in Russia; could not restrict the pre-installation of any competing search engines and apps, including on the home screen; could no longer require Google Search to be the only general search engine pre-installed.

Google also agreed with Russian antitrust authorities that it would no longer enforce its prior agreements where handset makers had agreed to any of these terms. Additionally, as part of the settlement, Google was required to allow third parties to include their own search engines into a choice window, and to allowing users to pick their preferred default search engine from a choice window displayed in GoogleChrome browser. The company was also required todevelop a new Chrome widget for Android devices already being used in Russia, to replace the standard Google search widget on the home screen so they would be offered a choicewhen it launched.

A year after Vestagerpublic announcement of the EUantitrust probe of Android, she issueda formal Statement of Objections, saying the Commission believed Google has &implementeda strategy on mobile devices to preserve and strengthen its dominance in general Internet search&; and flagging as problematic the difficulty for Android users whose devices come pre-loaded with the Google Play store to use other app stores (which cannot be downloaded fromGoogle Play).

She also raised concerns over Google providing financial incentives to manufacturers and mobile carriers on condition that Google search be pre-installed as the exclusive search provider. &In our opinion, as we see it right now, it is preventing competition from happening because of the strength of the financial incentive,& Vestager said in April 2016.

Google was given several months to respond officially to the antitrust charges against Android — which it finally did in November 2016, having been granted an extension to the Commissionoriginal deadline.

In its rebuttal then, Google argued that, contrary to antitrust complaints, Android had createda thriving and competitive mobile app ecosystem. It further claimed the EU was ignoring relevant competition in the form of Applerival iOS platform — although iOS does not hold a dominant marketshare in Europe, nor Apple have a status as a dominant company in any EU markets.

Google also argued that its &voluntary compatibility agreements& for Android OEMs are a necessary mechanism for avoiding platform fragmentation — which it said would make life harder for app developers — as well as sayingits requirement for Android OEMs to use Google search by default is effectively its payment forproviding the suite for free to device makers (given there is no formal licensing fee for Android).

It also couched &freedistribution is an efficient solution for everyone& — arguing it lowers prices for phone makers and consumers, while &still letting us sustain our substantial investment in Android and Play&.

In addition, Google sought tocharacterize open source platforms as &fragile& — arguing the Commissionapproach risked upsetting the &balance of needs& between users and developers, and suggesting their action could signal they favor &closed over open platforms&.