On May 8, 2019, the Italian Competition Authority (the AGCM or “ICA”) began investigations into Alphabet Inc., Google LLC and Google Italy S.r.l. (hereinafter, collectively “Google”) to establish whether it abused its dominant position in breach of Section 102 of the Treaty on the Functioning of the European Union (TFEU).
Specifically, according to the ICA’s preliminary allegations and in line with the recent European Commission’s decision regarding Google’s Android operating system, Google holds a dominant position in the market of licensable operating systems for smart devices (distinct from closed, non-licensable operating systems such as Apple’s iOS). Google has built an ecosystem around the Android for smart devices that includes, among others, unavoidable gatekeepers for apps developers and users of Android-based mobiles such as Google Play Store, Google Maps and the “Android Auto” app. The latter is an extension of Google Play Store for apps to be used while driving: it allows Android-based smartphone owners to easily and securely use apps and mobile phone functionalities when driving a vehicle by integrating the functionalities of several apps with, e.g., the wheel’s commands as well with the hardware and software embedded in electric and non-electric vehicles. As a result, the ICA pointed out that Android Auto has become a reference standard for the whole automotive industry and related app developers.
On the other hand, the Enel Group has developed the Enel X Recharge app (hereinafter, the “Enel X app”), which provides end-users with information and services for searching electric car battery rechargers and offers various functions such as, for example, the possibility of (i) viewing on a digital map the recharging stations for electric cars, (ii) accessing relevant information for recharging, and (iii) booking and paying for recharging stations.
As of May 2, 2018, the Enel X app is available on the Google Play Store and Apple’s App Store, but at the end of 2018 Google informed Enel that Enel X is incompatible with Android Auto, although Enel had developed the app following the specific guidelines provided by Google to create an app compatible with Android Auto.
According to the ICA, Google’s refusal to integrate the Enel X app into the Android Auto system may be unjustified and significantly limit the usefulness and usability of that app since the driver would only be able to use it when the vehicle is stationary. This conduct would favor the use of Google Maps, wherein Google already has or may quickly develop the whole range of functionalities for e-mobility that compete with Enel X, thus causing a distortion of competition as the conduct would not be based on the merit of the service.
Furthermore, the ICA considers that Google’s conduct is likely to undermine the incentive to develop vertical innovative digital services, i.e., those aimed at specific objectives to facilitate recharging electric vehicles, compared to the affirmation and strengthening of a horizontal tool, such as Google Maps, which aggregates a plurality of functions and services for end users. As a result, Google would ensure and reserve the acquisition and maintenance of the horizontal flow of data produced by users of Google Maps for itself, thus creating and exploiting real “data assets” that would enhance direct and indirect network effects (needed to attract and retain more consumers and app developers) and raise barriers to the entry of competing platform services
In conclusion, the ICA alleged that the abovementioned conduct by Google may constitute an attempt to defend and strengthen the horizontal business model of Google Maps as a unique point of access for users of multiple services (including vertical e-mobility functionalities) by exploiting the dominant position Google has through Android in the market of licensable mobile operating systems. The effect of such conduct would be a reduction of competition in digital and platform services for e-mobility with potential exclusionary effects for effective competitors (based not on the merits of the products or services); a reduction of the degree of innovation and quality of digital services for e-mobility; a reduction of such digital services’ variety and differentiation and, ultimately, of consumers’ choices. The time limit currently set for the conclusion of the investigation is May 30, 2020.
The ICA’s decision is available here.
