Payments to phone makers to pre-install just Google Search on their handsets were not intended to stifle competition, but were crucial for Android to overtake Apple in the market, according to Alphabet’s Google.
On the third day of a week-long hearing, Google addressed the General Court in an attempt to persuade justices to dismiss a record 4.3 billion euro ($3.7 billion) EU antitrust penalties and a European Commission directive to relax its grip on Android smartphones.
The European Commission’s competition authority had criticised two types of deals with phone manufacturers, one of which involved payments for only pre-installing Google Search on their handsets, known as revenue sharing arrangements (RSAs), because these effectively block out competitors.
This was not the case and the payments were just to encourage phone makers, which were already generating money from other apps, to give Android a place, Google lawyer Assimakis Komninos told the court.
“Google had to offer an offsetting revenue stream. An incentive to convince them to open up and adopt the Android platform. At the same time, the RSAs also helped them to keep prices down and compete more successfully with Apple,” he said.
“And obviously, Google was getting in return a promotional opportunity, sole preinstallation, which allowed it to invest in a free OS (operating system), a free app store and so on.”
On top of that, the RSAs only covered 5% of the market, Komninos said.
Commission lawyer Nicholas Khan rejected the claim.
“What concerned them was competitors gaining traction,” he said and the RDAs were “the pinnacle of Google`s interlocking practices”.
A verdict is likely to come next year. The case is T-604/18 Google vs European Commission
