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Factbox: EU charges Google with abusing Android's market dominance

, (Reuters) - The European Union charged Google on Wednesday with abusing its position as the dominant supplier of Android software for phones, opening a second front against the U.S. technology giant that could lead to large fines.

The following is a summary of the new charges:

LICENSING GOOGLE APPS

The Commission alleges that Google imposes unfair licensing conditions on device makers wanting to pre-install the Google Play Store, its app store for Android, which include making Google Search the default search engine.

It also alleged that Google required pre-installing its Chrome mobile browser in return for licensing Play Store or Google Search.

The Commission said it aims to ensure Android phone and tablet makers are free to choose which apps they include.

“The Commission has evidence that smartphone manufacturers would wish to source at least some of the apps that they pre-install from other parties than Google,” its statement read.

ANTI-FRAGMENTATION

Google created Android as open-source, meaning the software can be freely modified to create alternative operating systems. This is what many big Chinese smartphone makers do, as well as the smaller Silicon Valley Android developer Cyanogen.

However, any Android device maker wishing to pre-install the Google Play store or Google Search is required to agree to an “anti-fragmentation agreement” with Google which commits the vendor not to sell devices running on alternative versions of Android software, the Commission alleged.

Industry experts said this argument was confusing because, while all the world’s top makers of Android-powered smartphones choose to take advantage of pre-installing Google apps, several of them also now market phones based on alternatives including Cyanogen. That is, unless the EU has turned up evidence showing otherwise, they said.

EXCLUSIVITY

The Commission also said Google had given unspecified financial incentives to manufacturers and mobile network operators on condition that they exclusively pre-install Google Search on their devices.

It said it took issue not with financial incentives in general but with how Google ruled out payments if other search services were pre-installed on phones.

MARKET DOMINANCE

One necessary step in proving violations of EU antitrust rules is for the Commission to show that a company is not merely big in terms of market share but actually exerts “market dominance”. The charge sheet alleges Google dominates in:

1. General Internet search services - Asserts Google’s market share is 90 percent or above in most EU member states.

2. Licensable operating systems for smartphones, tablets and other devices - Google share with Android exceeds 90 percent. Apple’s iOS operating system is proprietary to the device maker and thus does not fall within the definition chosen by the Commission.

Two thirds of all mobile phones used in Europe this month were running on Android, according to StatCounter data. Devices running on Apple’s iOS software account for another 27 percent, leaving other systems such as Microsoft and Blackberry barely registering in the rankings.

3. App stores for Android-based mobile phones which enable users to choose and download from a vast selection of apps - Google Play Store accounts for more than 90 percent of Android app downloads in the roughly 30-country European Economic Area, according to Commission estimates.

Reporting by Foo Yun Chee in Brussels and Eric Auchard in Frankfurt; Editing by Greg Mahlich

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