Following competition objections raised to Google in Germany this summer over the bundling of services including Google Maps via its Android-based in-car infotainment system software, known as Google Automotive Services (GAS), the tech giant made a bid to unbundle some services and remove… Contractual restrictions that apply to vehicle makers in an attempt to iron out regulatory interference.
The remedies Google is proposing to carmakers will be put to market testing by the German competition regulator before it decides whether they will solve the problems identified.
Back in June, the country The Federal Cartel Office (FCO) sent a statement of objections to the tech giant on how it operates GAS – specifically calling out Google’s bundling of Google Maps, Google Play and Google Assistant in the presentation to vehicle manufacturers.
The statement also highlighted Google’s practice of giving vehicle makers a share of ad revenue only if they refrain from pre-installing other voice assistants next to their own voice AI. Another concern raised by the FCO is that Google requires GAS licensees to set its bundled services as a default service or display them more prominently. It also objected to Google restricting or refusing to allow interoperability of services embedded in GAS with third-party services.
At the time, the British Foreign Office said its preliminary view of Google’s practices on GAS was that they did not comply with German competition rules for large digital companies — which give the British Foreign Office greater scope to intervene when it suspects competition is being harmed.
The British Foreign Office said in the summer: “In particular, we take a critical view of Google offering its infotainment services as only one package, as this reduces the chances of its competitors selling their competing services as individual services.”
The regulator said it will now carefully examine Google’s bid to determine whether it will address competition concerns by offering an appropriate level of unbundling of its own services from the in-car infotainment platform.
“We are particularly concerned about the forced bundling of services with significant market power and access to services with less power. This behavior in particular could lead to the expansion of market power and the strengthening of ecosystems; it is a particularly problematic approach,” Foreign Ministry head Andreas Mundt said in a statement. Especially for market penetration. press release to announce Google’s offer on Wednesday. “This could reduce competitors’ opportunities to sell competing services. We will now closely examine whether Google’s proposals are able to effectively end the practices that raised concerns.”
Google’s proposed solutions to address the FCO’s competition concerns are to separately offer three other products: an OEM software development kit for Google Maps, the Google Play Store, and Cloud Custom Assistant, as well as a GAS product suite – which it says will enable automakers to develop… A mapping and navigation service with functionality equivalent to that offered by Google Maps.
The addition of the Google Play Store will also allow end users to download a wide range of third-party apps, to reduce concerns about being pushed towards using Google’s own apps. Cloud Custom Assistant is described as an “AI voice assistant solution” for use in vehicles to enable automakers to offer competitive assistants.
The tech giant also proposed removing its contractual provisions on ad revenue sharing on the condition that its Google Voice Assistant is pre-installed exclusively in the GAS infotainment system.
The State Department also noted that “Google is also prepared to revoke its contractual provisions regarding designating Google services as default applications or displaying them prominently in the infotainment platform.” “Finally, Google is ready to enable licensees to combine Google Assistant services with maps and other navigation services and provide the technical prerequisites to create the necessary interoperability.”
“Based on the results of market tests Bundeskartellamt [FCO] It will decide whether Google’s proposals are generally able to allay the concerns addressed. He added that the question of whether Google’s proposals would lead to an unbundled offer of Google services in the automotive sector would be crucial in this context.
Google has been contacted for comment on its proposals.
The tech giant’s business was designated as subject to Germany’s special competition abuse monitoring regime in January 2022. Since then, the Foreign Office has extracted a number of concessions from it over how it operates — including, this fall, securing an agreement on fixing Google’s data. Terms under which you will provide users with more choices about how their information is used. Last year, Google also offered to limit how news content licensed from third-party publishers was displayed in search results in an attempt to resolve the regulator’s concerns about subjective favoritism.
The German digital competition reboot applies only to specific tech giants locally, in the market – although companies may choose to apply product changes globally to manage operational complexity (as Meta, for example, did this summer with the launch of a new account center that allows and disables users Cross-site tracking, after the UK Foreign Office intervened, which the company said would be rolled out globally).
The EU also recently implemented its own prior competition reforms, in the form of the Digital Markets Act (DMA), targeting so-called internet gatekeepers. So the FCO’s enforcement action on Big Tech offers a glimpse into the kinds of actions that may be taken across the bloc next year when the deadline for compliance kicks in for the DMA’s six in-band gatekeepers and its 22 platform services – a list that includes Google Maps, Google Play, Google Shopping, Google Ads, Google Chrome, Google Android, Google Search, and Google-owned video sharing platform, YouTube.
Notably, the EU has not designated GAS as an essential platform service – which may partly explain the FCO’s interest in it here, as the bloc’s competition regulators work to avoid duplication in their interventions. (Germany, being a major automaker, is also likely to lead its oversight of Google’s automotive software and services.)
While the UK Foreign Office also opened a procedure on Google Maps in June 2022, that was (soon) before the DMA was approved by lawmakers involved in the bloc.
Meanwhile, the pan-EU regulation came into effect in May 2023. But the deadline for DMA portal administrators to comply is March 2, 2024, so a full restart of the major EU-wide tech competition won’t be up and running until next year. Which may give the British Foreign Office enough reason to continue its scrutiny of Google Maps in the meantime. (The German regulatory body is also on this front He said It will continue to “cooperate closely” with EU competition authorities on regulating the digital economy.)
From June 2023, the UK Foreign Office said it would continue to investigate Google’s terms of use of its Google Maps Platform (GMP), then saying its initial assessment was that the tech giant would need to put an end to restrictions on combining its GMP mapping services. With third party mapping services.
“These restrictions may hinder competition between apps related to mapping services as used by logistics, transport and delivery service providers, for example,” the UK Foreign Office said at the time. “It may also have a negative impact on competition among vehicle infotainment services because it makes it more difficult for mapping service providers to develop effective alternatives to Google Maps.”
Advance competition law reforms in Germany and across the EU aim to curb abusive behavior by digital giants that may further entrench their enormous market power – with European regulators hoping that these more proactive interventions can do a better job of correcting imbalances in the digital economy. . Enforcement of classical competition has been achieved. (A classic enforcement-related example is the $123 million fine the Italian competition watchdog imposed on Google in May 2021, over restrictions it applied to a third-party app maker via its in-car Android Auto software.)