Google's $5bn fine highlights unfair market

Google's $5bn fine highlights unfair market
Google has control over 80% of the smartphone market.
Published: 19 July 2018 - 12:50 a.m.
By: Mark Sutton

Google's record fine for abusing the dominant position of Android highlights the need for more consumer choice and a more open market, according to Mark Skilton of Warwick Business School.

Skilton, who is Professor of Practice in Information Systems & Management, said that Google has a ‘de facto' control over the market, with smartphone vendors locked to its OS and Search.

Google has been fined 4.34 billion euros by the European Commission for abusing the position of Android to promote Search and lock in smartphone vendors to its store.

Professor Mark Skilton said: "It looks like this time the fine will fit the 'crime' in this long running dispute of market dominance and manipulation.

"Google has always been a contradiction, in that it is a market facilitator who also wants to control that market. Google claims that it has to compete with other big players and that swapping to an alternative search service is 'one click away', but in my view it is its locking up of around 80% of mobile devices with pre-installed Google Android software that is the issue.

"The real issue is not the supplier side 'problems' which have been dominating the shape of the market; its having a demand side where consumers have real choice instead of being locked into just one vendor's world view of the digital economy.

"It must be remembered Google 'defines the market' and is not just an innocent bystander.

"Google claims it is a free market for users, but that's just not true in practice. Granted, as we see in the telecoms market, network operators want to protect their billion-dollar investment in the infrastructure that enables all this internet to work, but it is when it becomes a monopolistic control from the supplier to the end user that it becomes a problem.

"The internet is in urgent need of moving to its next level of evolution, which will be a more distributed and edge-based world. It is being seen with the rise of the internet of things that are multiplying the number of connections to smart homes, products, transport and everything else - this will bring a more open market.

"This is the next battleground for Google and the big tech players, but GDPR and the European Commission's focus on the tech giants is becoming a significant issue for them."

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