Google hit with $123M antitrust fine in Italy over Android Auto

Google has been fined just over €100 million (~$123M) by Italy’s antitrust watchdog for abuse of a dominant market position.

The case relates to Android Auto, a modified version of Google’s mobile OS intended for in-car use, and specifically to how Google restricted access to the platform to an electric car charging app, called JuicePass, made by energy company Enel X Italia.

Android Auto lets motorists directly access a selection of relevant apps (like maps and music streaming services) via a dash-mounted screen. But Enel X Italia’s JuicePass app was not one of the third party apps Google granted access to.

The app is accessible via the smartphone version of the Android platform — but of course a driver shouldn’t be reaching for their phone when at the wheel. So barring access through Android Auto puts a significant blocker on relevant usage.

Google’s market restriction of JuicePass has drawn the attention — and now the ire — of Italy’s competition watchdog.

The AGCM said today that Google has violated Article 102 of the Treaty on the Functioning of the European Union — and has ordered it to make the JuicePass available via the platform.

It also says Google must to provide the same interoperability with Android Auto to other third party app developers.

The authority points out that the Google Maps app, which offers some basic services for electric vehicle charging (such as finding and getting directions to charging points), is available via Android Auto — and could, in future, incorporate directly competitive features like payments.

“According to the Authority’s findings, Google did not allow Enel X Italia to develop a version of its JuicePass app compatible with Android Auto, a specific Android feature that allows apps to be used while the user is driving in compliance with safety, as well as distraction reduction, requirements,” the AGCM writes in a press release announcing the sanction [translated to English using Google Translate]. “JuicePass enables a wide range of services for recharging electric vehicles, ranging from finding a charging station to managing the charging session and reserving a place at the station; this latter function guarantees the actual availability of the infrastructure once the user reaches it.

“By refusing Enel X Italia interoperability with Android Auto, Google has unfairly limited the possibilities for end users to avail themselves of the Enel X Italia app when driving and recharging an electric vehicle. Google has consequently favored its own Google Maps app, which runs on Android Auto and enables functional services for electric vehicle charging, currently limited to finding and getting directions to reach charging points, but which in the future could include other functionalities such as reservation and payment.”

Google denies any wrongdoing and says it disagrees with the order. But it did not confirm whether or not it intends to appeal.

The tech giant claims the restrictions it places on apps’ access to Android Auto are necessary to ensure drivers are not distracted. It also told us that it has been opening up the platform to more apps over time — with “thousands” now compatible.

It added that its intention is to keep expanding availability.

Google did not comment on why Enel X Italia’s app for recharging electric vehicles was not among the “thousands” it has already granted access to, however.

Per the AGCM, Enel X Italia’s app has been excluded from Android Auto for more than two years.

Here’s Google’s statement:

“The number one priority for Android Auto is to ensure apps can be used safely while driving. That’s why we have strict guidelines on the types of apps which are currently supported and these are based on driver-distraction tests and regulatory and industry standards. Thousands of applications are already compatible with Android Auto, and our goal is to allow even more developers to make their apps available over time. For example, we have introduced templates for navigation, charging, and parking apps, open for any developer to use. We disagree with the Authority’s decision and we will review our options.”

Google has a dominant position in the market via the Android smartphone platform, with a marketshare in Italy of around three-quarters according to the competition watchdog.

Under European Union law, a finding of market dominance in one market puts a responsibility on a company not to restrict competition in any other markets where it operates — and the EU already found Google to be a dominant company in general Internet search in every market in the European Economic Area back in 2017.

The AGCM said it’s concerned about the impact of Google’s restrictions on app access to Android Auto on the growth of the electric mobility market.

“If it were to continue, [it] could permanently jeopardise Enel X Italia’s chances of building a solid user base at a time of significant growth in sales of electric vehicles,” it wrote, adding that Google’s action in excluding the JuicePass app meant it did not appear in the list of applications used by users — thereby reducing consumer choice and creating a barrier to innovation.

The authority suggests Google’s conduct could influence the development of electric mobility during a crucial phase — as recharging infrastructures for electric cars are being built out and can help fuel growth and demand for recharging services.

“Consequently, possible negative effects could occur to the diffusion of electric vehicles, to the use of ‘clean’ energy and to the transition towards a more environmentally sustainable mobility,” it warned, linking anti-competitive behavior to negative consequences for the environment.

The AGCM added that it will monitor Google’s compliance with its order to ensure it effectively and correctly implements the obligations to provide third party app developers with access to Android Auto.

The authority’s action could be a taster of what’s coming down the pipe for gatekeeper players like Google in Europe under the incoming Digital Markets Act (DMA).

The flagship legislative proposal is intended to supplement ex post competition law enforcement with ex ante rules on how dominant platforms which intermediate others’ market access can behave — including by imposing up front requirements that they support interoperability.

The idea with the DMA is to supplement the slow and painstaking work needed to bring competition investigations to fruition with proactive measures slapped on tech giants to prevent certain types of known market abuse in the first place. Although the regulation is likely years out from being adopted and applied across the EU.

In the meanwhile competition probes of big tech continue.

Italy’s AGCM opened one into Google’s ad display business last October, for example.

Google has already faced a number of EU antitrust decision in recent years — including a $5BN penalty over how it operates Android. Although search rivals continue to complain that the remedy Google devised for that 2018 decision still does not sum to fair competition.

The truth about SDK integrations and their impact on developers

The digital media industry often talks about how much influence, dominance and power entities like Google and Facebook have. Generally, the focus is on the vast troves of data and audience reach these companies tout. However, there’s more beneath the surface that strengthens the grip these companies have on both app developers and publishers alike.

In reality, software development kit (SDK) integrations are a critical component of why these monolith companies have such a prominent presence. For reference, an SDK is a set of software development tools, libraries, code samples, processes and guides that help developers create or enhance the apps they’re building.

Through a digital marketing lens, SDKs provide in-app analytics, insights on campaign testing, attribution information, location details, monetization capabilities and more.

Through a digital marketing lens, SDKs provide in-app analytics, insights on campaign testing, attribution information, location details, monetization capabilities and more. In the case of companies like Google and Facebook, their ability to provide these insights dovetails with their data and reach.

While that does deliver useful capabilities to developers and publishers alike, it also perpetuates the factors contributing to their perceived monopolistic status — and the detriments a lack of competition fosters.

Almost all (90%) ad-monetized Android apps have Google’s Admob SDK integrated, data from Statista showed. Additionally, the Facebook Audience Network SDK is present in 19% of all global Android apps utilizing mobile ads. It’s worth noting that the large majority of alternative “leading” advertising SDKs outside these two players are used less than 13% of the time in Android apps.

As the app ecosystem rapidly expands beyond the borders of mobile, app developers and publishers would benefit immensely from identifying economical and secure ways of adopting more SDKs.

The state of SDK adoption

While there are many SDKs available in the market today, a few key factors contribute to Google and Facebook’s overall dominance. The most basic is around the respective organizations’ reach and industry notoriety. However, a larger component here is the lack of resources and time app developers have.

Facebook is testing pop-up messages telling people to read a link before they share it

Years after popping open a Pandora’s box of bad behavior, social media companies are trying to figure out subtle ways to reshape how people use their platforms.

Following Twitter’s lead, Facebook is trying out a new feature designed to encourage users to read a link before sharing it. The test will reach 6% of Facebook’s Android users globally in a gradual rollout that aims to encourage “informed sharing” of news stories on the platform.

Users can still easily click through to share a given story, but the idea is that by adding friction to the experience, people might rethink their original impulses to share the kind of inflammatory content that currently dominates on the platform.

Twitter introduced last June prompts urging users to read a link before retweeting it, and the company quickly found the test feature to be successful, expanding it to more users.

Facebook began trying out more prompts like this last year. Last June, the company rolled out pop-up messages to warn users before they share any content that’s more than 90 days old in an an effort to cut down on misleading stories taken out of their original context.

At the time, Facebook said it was looking at other pop-up prompts to cut down on some kinds of misinformation. A few months later, Facebook rolled out similar pop-up messages that noted the date and the source of any links they share related to COVID-19.

The strategy demonstrates Facebook’s preference for a passive strategy of nudging people away from misinformation and toward its own verified resources on hot-button issues like COVID-19 and the 2020 election.

While the jury is still out on how much of an impact this kind of gentle behavioral shaping can make on the misinformation epidemic, both Twitter and Facebook have also explored prompts that discourage users from posting abusive comments.

Pop-up messages that give users a sense that their bad behavior is being observed might be where more automated moderation is headed on social platforms. While users would probably be far better served by social media companies scrapping their misinformation and abuse-ridden existing platforms and rebuilding them more thoughtfully from the ground up, small behavioral nudges will have to do.

 

Equity Monday: Dogecoin is passé, but student notes are big business

Hello and welcome back to Equity, TechCrunch’s venture capital-focused podcast where we unpack the numbers behind the headlines.

This is Equity Monday, our weekly kickoff that tracks the latest private market news, talks about the coming week, digs into some recent funding rounds and mulls over a larger theme or narrative from the private markets. You can follow the show on Twitter here and myself here.

This weekend was all about memecoins. And I am sorry about that. But Equity doesn’t run the world, sadly, it merely notes what is going on:

  • Dogecoin dropped during Elon Musk’s SNL appearance. Which was somewhat ironic. Also there’s another memecoin that is skyrocketing.
  • Palantir, DoorDash, Airbnb and Alibaba will report earnings this week, amongst others.
  • Clubhouse is finally coming to Android. In the United States. By invite. So, if that’s you, congrats, welcome to the app.
  • A major cyberattack and ransom situation in the United States is a data point, yet again, that we’re woefully unprepared for cyber risk.
  • StuDocu raised $50 million which was cool, while Gojek raised another $300 million, which was the very opposite of surprising.
  • This week’s Extra Crunch Live is going to be really good. I will see you there!

It is going to be a busy week! Already since we recorded this show there’s more drama from Box, and more. Strap in!

Equity drops every Monday at 7:00 a.m. PST, Wednesday, and Friday at 6:00 AM PST, so subscribe to us on Apple PodcastsOvercastSpotify and all the casts!

Clubhouse finally launches its Android app

Clubhouse finally has an Android app that you can download from the Play Store — provided you live in the U.S.

The voice-based social network launched its beta Android app on Play Store for users in the U.S. on Sunday, and said it will gradually make the new app available in other English-speaking countries and then the rest of the world.

The social network, valued at about $4 billion in its most recent fundraise, launched as an iPhone-only app last year. The app quickly gained popularity last year, attracting several high-profile celebrities, politicians, investors, and entrepreneurs.

Clubhouse began developing the Android app early this year and started to test the beta version externally this month. In a town hall earlier Sunday, the startup said availability on Android has been the most requested product feature.

“Our plan over the next few weeks is to collect feedback from the community, fix any issues we see and work to add a few final features like payments and club creation before rolling it out more broadly,” the team wrote.

Clubhouse download figures across some of its popular markets, according to estimates by mobile insight firm AppMagic. (Though Clubhouse’s precise download figures from other mobile insight firms vary, they all agree that Clubhouse app’s popularity has dropped in recent months.)

As Clubhouse struggles to maintain its growth — data from mobile insight firms including AppMagic suggests that Clubhouse installs have drastically dropped in recent months — the Android app could prove pivotal in boosting the startup’s reach across the globe.

Clubhouse could potentially — on paper — also supercharge its growth by allowing any user to join the service without an invitation. But the startup said retaining the waitlist and invite system is part of its effort to “keep the growth measured.” (Clubhouse has faced several moderation challenges in recent months.)

Clubhouse’s launch on Android comes at a time when scores of technology giants including Facebook, Twitter, Discord, Spotify, Reddit, and Microsoft’s LinkedIn, have either launched their similar offerings — or announced plans to do so.

Twitter’s clone of Clubhouse, called Spaces, has emerged as one of the biggest competitors to the A16z and Tiger Global-backed-startup. An unplanned Twitter Spaces, available on Android as well, hosted by a high-profile Indian startup founder on earlier Sunday attracted hundreds of listeners within a few minutes, for instance.

“As we head into the summer and continue to scale out the backend, we plan to begin opening up even further, welcoming millions more people in from the iOS waitlist, expanding language support, and adding more accessibility features, so that people worldwide can experience Clubhouse in a way that feels native to them,” Clubhouse team wrote.

Clubhouse’s beta Android app currently lacks a number of features such as the ability to follow a topic, in-app translations, localization, ability to create or manage a club, link Twitter and Instagram profiles, payments, as well as the ability to change the profile name or user name.

“With Android, we believe that Clubhouse will feel more complete,” read the blog post.