European regulators are preparing what could be a stern challenge to Google's mobile software business in the coming months after a nearly four-year investigation into the company's web search practices left rivals and European politicians dissatisfied.
Two sources with direct knowledge of the matter said that with a new antitrust chief taking over in November, European regulators are laying the groundwork for a case centred on whether Google abuses the 80 percent market share of its Android mobile operating system to promote services from maps to search.
The Commission has stepped up inquiries just in recent weeks, sending companies questionnaires that seek far more details than previous queries on the matter in 2011 and 2013.
In one questionnaire, respondents were asked whether there was a requirement set by Google, written or unwritten, that they not pre-install apps, products or services on mobile devices that compete with Google software like its search engine, app store and maps.
Companies must provide emails, faxes, letters, notes from phone calls and meetings, and presentations stretching as far back as 2007 related to such deals with Google, suggesting the European Commission wants to know if Google’s behavior has been long-term. Respondents have been given until early September to reply to more than 40 questions.
While any company is free to use Android as they choose, mobile handset makers that want to use the newest version must sign a contract that stipulates a minimum number of Google services be pre-installed on devices, according to a third source, a former Google executive with knowledge of the matter.
The impending Android inquiry adds to a growing list of regulatory challenges that complicate the company's ambitions in a vital market. Europe accounted for more than US$30 billion in digital advertising spending in 2013.
The European Commission is likely to start a formal probe into Android once it wraps up an investigation into whether Google ranks its own services higher than those of its rivals in search results, according to the two people with knowledge of the matter.
One of the sources said going after Android would help stem a growing chorus of complaints.
Google struck a deal with Outgoing European Commission antitrust chief Joaquin Almunia in February by agreeing to display rivals' links more prominently, but the preliminary settlement was criticised as inadequate by rivals such as Microsoft, consumer review site Yelp and German and Spanish publishers, as well as some European politicians.
Almunia may decide to open a second case against Google at the same time he announces the closing of the first, the source said.
Google faces criticism in Europe about everything from privacy to tax policies, and is wrestling with a European court’s ruling that requires it to remove links from search results that individuals find objectionable.
Android's 80 percent market share is at a level akin to Microsoft's Windows, itself the target of a long-running European investigation.
At the same time, the company has grown so large as to inspire distrust in some corners, with a chorus of public criticism from politicians and business executives.
"They are in a stormy patch at the moment" in Europe, said Alasdair Young, a professor at Georgia Tech’s Sam Nunn School of International Affairs. “It’s pretty unusual for a company to be hit by so many big policy threats at the same time.”
The search investigation is not a done deal, with the Commission having indicated it may seek more concessions from Google before making a final decision in September.
But the real fight may be shifting to mobile.
Android represents a crucial channel for Google to extend its search engine into the mobile world. Regulatory action that impedes Google’s ability put search front-and-centre within Android could threaten its primary money-making service.
Handset makers such as Samsung and LG may also benefit by being freer to pre-install or alternative online services on devices. That may in turn grant better shop-window placement to rival services from Microsoft and Yahoo.
A Google spokeswoman said Google is committed to keeping Android open and that "anyone can use Android without Google, and anyone can use Google without Android."