- Google have been in competition objections in Germany over the bundling of services, including Google Maps in its in-car infotainment system software.
- The German competition regulator raised objections to how Google operates GAS, specifically calling out Google’s bundling of Google Maps, Google Play, and Google Assistant.
- Google has made an offer of service unbundling and the removal of contractual restrictions to settle the regulatory intervention.
- Google has proposed separate offerings for Google Maps OEM Software Development Kit, Google Play Store, and Cloud Custom Assistant in addition to the GAS product bundle.
- The European Union has implemented its own competition reformed with the Digital Markets Act, aimed at Internet gatekeepers, and the FCO’s enforcements on Big Tech offer a glimpse of future actions.
Are Google’s proposed remedies enough to dispel the concerns raised by German competition regulators? Following objections over the bundling of services in Google Automotive Services (GAS), the tech giant has made an offer of unbundling and the removal of contractual restrictions to settle the regulatory intervention. But will this be enough to satisfy the German competition regulator, and what does it mean for the wider European tech industry? In this blog post, we’ll explore Google’s proposed remedies and the potential impact on the automotive and digital sectors.
Following competition objections raised on 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 has made an offer of some service unbundling and the removal of contractual restrictions it applies to vehicle makers in a bid to settle the regulatory intervention. Google’s proposed remedies will be put to car makers in a market test by the German competition regulator before it decides whether or not they resolve issues it has identified.
In June, the country’s competition regulator raised objections to the tech giant over how it operates GAS — specifically calling out Google’s bundling of Google Maps, Google Play, and Google Assistant in the offer to vehicle manufacturers. The statement also highlighted Google’s practice of only granting vehicle makers a share of ad revenue if they refrained from pre-installing other voice assistants next to its own voice AI. Another concern the FCO raised is GAS license holders are required by Google to set its bundled services as the default, or else display them prominently. It also objected to Google limiting or refusing to allow interoperability of services included in GAS with third-party services.
At the time, the FCO said its preliminary view of Google’s practices around GAS were that they do not comply with Germany’s competition rules for large digital companies. “In particular, we take a critical view of Google offering its services for infotainment systems as a bundle only, as this reduces its competitors’ chances to sell their competing services as individual services,” the FCO said in the summer. The regulator said it will now carefully examine Google’s offer to decide if it fixes the competition concerns by offering an adequate level of unbundling of its services from its in-car infotainment platform.
nGoogle’s Proposed Remediesn
The remedies Google has proposed to address the FCO’s competition concerns are to separately offer three further products: Google Maps OEM Software Development Kit, Google Play Store, and Cloud Custom Assistant, in addition to the GAS product bundle. The addition of the Google Play Store would also allow end-users to download a wider choice of third-party apps, to reduce concerns about them being nudged towards using Google’s own apps. The Cloud Custom Assistant is described as “a proprietary AI voice assistant solution” for use in vehicles to enable car makers to offer competing assistants.
nRemoval of Contractual Provisionsn
The tech giant has also proposed to remove contractual provisions it imposes on sharing ad revenue on the condition its own Google Assistant voice AI is exclusively pre-installed in the GAS infotainment platform. It is also prepared to eliminate its contractual provisions on setting Google services as default applications or displaying them prominently in the infotainment platform. Lastly, Google is prepared to enable license holders to combine Google Assistant services with other maps and navigation services and provide for the technical preconditions to create the necessary interoperability.
Based on the results of the market tests, the Bundeskartellamt [FCO] will decide whether Google’s proposals are generally capable of dispelling the concerns that have been addressed. The question of whether Google’s proposals will result in an unbundled offering of Google’s services in the automotive sector will be decisive in this context.
The European Union also recently implemented its own ex ante competition reformed, in the form of the Digital Markets Act (DMA), which is aimed at so-called Internet gatekeepers. So the FCO’s enforcements on Big Tech offer a glimpse of the types of actions that may be coming down the pipe across the bloc next year when the deadline for compliance kicks in for the — a list which includes Google Maps, Google Play, Google Shopping, Google ads, Google Chrome, Google Android, Google search, and the Google-owned video sharing platform, YouTube. European regulators are hoping these proactive interventions can do a better job of correcting imbalances in the digital economy than classical competition enforcement has been able to achieve.
