Android under the light of investigation
Antitrust probes are back to haunt Alphabet’s (GOOGL) Google in Italy and India. If proved guilty, Google could end up paying massive fines. It is being ascertained in Italy whether Google indulged in abuse of dominance of its Android platform.
Italy’s antitrust regulator is heading the mission of investing into these allegations. Enel which is Italy’s prime utility company is into multinational energy and is located in 34 countries across 5 continents.
They happen to be the complainants in this case. According to Enel, Google has allegedly refused to include an app that was developed by Enel into the Android software for vehicles.
Google faced the same fate in India when a probe was set rolling against them to check whether Google played a similar dominance of its Android platform but this time in mobile devices.
According to a report carried out by Reuters the probe in India and the one by the European Union revolves around the same violations which had resulted in Google having to shell out a fine of $5.0 billion last year in the last year.
Google could be fined up to 10% of revenue
India’s antitrust laws are gunning for the company and if Google is held guilty of violating them then they could end up paying 10% of revenue from the relevant businesses for three financial years as a fine.
The fines are just one part of the story, what is even more significant is that the investigations in Italy and in India are on the verge of diminishing the Internet giant’s competitiveness.
This is because in case Google is found guilty they will have to work on changing their business models. Google’s Android platform is an integral part of Internet giant’s advertising business.
Advertising has always contributed vastly to the parent company Alphabet’s revenue. Alphabet’s revenue in the first quarter had a contribution of 85% from advertising as compared to 72% at both Yandex (YNDX) and Baidu (BIDU). Twitter and Facebook got a whopping 99% and 86% of their income from advertising in the first quarter.