Google CEO To Take A Constructive Approach To Deal With Massive $5 Billion Android Fine
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Margrethe Vestager, the European Union antitrust cop, gave Google 90 days to end ‘illegal’ practices surrounding its Android operating system or face further fines, after slapping a record $5 billion anti-trust penalty on the US tech giant. (Photo by Dursun Aydemir/Anadolu Agency/Getty Images)

In his comments during Google’s latest earnings call yesterday, CEO Sundar Pichai shared an update on the company’s mobile operating system Android and his strategy on how he intends to respond to the European Commission’s decision to fine the company a massive $5 billion based on certain contractual provisions in agreements, signed between Google and Android partners, that infringed European competition law.

"10 years ago, we launched the first Android phone with a simple idea to build a mobile platform that’s free and open to everyone," said Pichai. "Today, there are more than 24,000 devices at every price point from more than 1,300 different brands."

Google’s CEO also pointed out that the Android ecosystem supports thousands of phone makers and mobile network operators who build and sell Android devices, as well as millions of app developers around the world who have built their businesses on Android, and billions of consumers who can now afford and use cutting-edge Android smartphones.

"This is all supported by a business model that encourages and enables this open ecosystem to thrive, " added Pichai.

A more conciliatory tone with Europe

Pichai also reiterated his views that Android has created more choice for everyone. " You can clearly see there is robust competition. There is a lot of innovation, lower prices that have made Android possible at every price point," said Pichai.

However, in contrast with his more combative stance last week, when he first replied – via a blog post – to the European Commission’s decision, we found that he adopted a more conciliatory tone this time which is for us an early sign that Google is ready to settle with Europe.

"We are analyzing the decision and I think it’s too early to comment or speculate beyond what you’ve already said. But we will always take a constructive approach. We’ll appeal the Commission’s decision and take the due process available to us. But, we are also looking forward to finding a solution above all that preserves the enormous benefits of Android to users and so on. So, there is small work to be done and I think it will become clearer as we go along. But I’m confident that we can find a way to make sure Android is available at scale to users, everyone."

Atherton Research Viewpoint

We believe that similar to the previous Google Shopping anti-trust case last year in Europe, Google will eventually change its anti-competitive business practices with its Android partners while the case goes into appeal – which could last up to 2 years.

However, and unlike the Google Shopping anti-trust case, this time around, Google has 90 days, until October, to make the changes or – and this hasn’t been very much reported – face penalty payments of up to 5% of the average daily global revenue of Alphabet, Google’s parent company, on top of the initial $5 billion fine, which amounts to about $18 million every day until the case is settled.

"The initial $5 billion fine will look tiny compared to the additional penalty fine which could add up to more than double that amount by the time the case is resolved," said Eric Leandri, the CEO and co-founder of search engine Qwant and one of the plaintiff in this case.

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Margrethe Vestager, the European Union antitrust cop, gave Google 90 days to end ‘illegal’ practices surrounding its Android operating system or face further fines, after slapping a record $5 billion anti-trust penalty on the US tech giant. (Photo by Dursun Aydemir/Anadolu Agency/Getty Images)

In his comments during Google’s latest earnings call yesterday, CEO Sundar Pichai shared an update on the company’s mobile operating system Android and his strategy on how he intends to respond to the European Commission’s decision to fine the company a massive $5 billion based on certain contractual provisions in agreements, signed between Google and Android partners, that infringed European competition law.

“10 years ago, we launched the first Android phone with a simple idea to build a mobile platform that’s free and open to everyone,” said Pichai. “Today, there are more than 24,000 devices at every price point from more than 1,300 different brands.”

Google’s CEO also pointed out that the Android ecosystem supports thousands of phone makers and mobile network operators who build and sell Android devices, as well as millions of app developers around the world who have built their businesses on Android, and billions of consumers who can now afford and use cutting-edge Android smartphones.

“This is all supported by a business model that encourages and enables this open ecosystem to thrive, ” added Pichai.

A more conciliatory tone with Europe

Pichai also reiterated his views that Android has created more choice for everyone. ” You can clearly see there is robust competition. There is a lot of innovation, lower prices that have made Android possible at every price point,” said Pichai.

However, in contrast with his more combative stance last week, when he first replied – via a blog post – to the European Commission’s decision, we found that he adopted a more conciliatory tone this time which is for us an early sign that Google is ready to settle with Europe.

“We are analyzing the decision and I think it’s too early to comment or speculate beyond what you’ve already said. But we will always take a constructive approach. We’ll appeal the Commission’s decision and take the due process available to us. But, we are also looking forward to finding a solution above all that preserves the enormous benefits of Android to users and so on. So, there is small work to be done and I think it will become clearer as we go along. But I’m confident that we can find a way to make sure Android is available at scale to users, everyone.”

Atherton Research Viewpoint

We believe that similar to the previous Google Shopping anti-trust case last year in Europe, Google will eventually change its anti-competitive business practices with its Android partners while the case goes into appeal – which could last up to 2 years.

However, and unlike the Google Shopping anti-trust case, this time around, Google has 90 days, until October, to make the changes or – and this hasn’t been very much reported – face penalty payments of up to 5% of the average daily global revenue of Alphabet, Google’s parent company, on top of the initial $5 billion fine, which amounts to about $18 million every day until the case is settled.

“The initial $5 billion fine will look tiny compared to the additional penalty fine which could add up to more than double that amount by the time the case is resolved,” said Eric Leandri, the CEO and co-founder of search engine Qwant and one of the plaintiff in this case.

(Excerpt) Read more Here | 2018-07-25 05:53:49

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