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Google tells EU court payments to phone makers gave Android a chance against Apple By Reuters


© Reuters. FILE PHOTO – A sign outside the Google headquarters is seen in Mountain View (California), U.S.A, on May 8th 2019. REUTERS/Paresh Dave

By Foo Yun Chee

LUXEMBOURG (Reuters) – Payments to phone makers to pre-install only Google Search on their devices were not aimed at preventing competition but were necessary for Android to seize market share from Apple (NASDAQ:), Alphabet (NASDAQ:)’s Google told Europe’s second-top court on Wednesday.

Google appeared before the General Court in the third day after a long hearing. The company is trying to persuade judges not to dismiss an unprecedented 4.3-billion euro ($3.7 billion EU antitrust penalty) and a European Commission directive to reduce its grip on Android search engines.

Because these deals shut out competitors, the EU competition watchdog was critical of two types of phone maker agreements. They were revenue sharing arrangements that allow phones makers to pay for Google Search only.

Assimakis Kaomninos, Google’s lawyer, said that payments were not intended to discourage phone companies, which already generate money through other apps, from giving Android a chance.

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Google needed to create an alternative revenue stream. They needed to offer an incentive for them to adopt Android. The RSAs allowed them to compete with Apple at lower prices, he stated.

Google got in return an opportunity to promote, solely preinstallation. It was able to invest in free OS (operating-system), free apps store, etc.

Komninos claimed that only 5% was covered by the RSAs.

Nicholas Khan, a lawyer for the Commission, denied this claim.

Nicholas Khan, a lawyer for the Commission, rejected the claim. He said that what concerned them was competition gaining traction and that RDAs were “the pinnacle Google’s interlocking practice”.

The verdict will likely be announced next year. The case is T-604/18 Google vs European Commission

($1 = 1.1714 euros)

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