Following competition objections in Germany this summer over its bundle of services, including Google Maps through its Android-based car infotainment software known as Google Automotive Services (GAS), the tech giant has made a offering unbundling services and removing contractual restrictions on vehicle manufacturers in an attempt to settle regulatory interference.
Google’s proposed remedies will be put to the carmakers’ market test by the German competition regulator before it decides whether they fix problems identified.
Back in June, the country The Federal Cartel Office (FCO) sent a statement of objections to the tech giant about how GAS works — specifically mentioning Google’s bundling of Google Maps, Google Play and Google Assistant in the offering to vehicle manufacturers.
The statement also highlighted Google’s practice of only granting vehicle manufacturers a share of ad revenue if they refrain from pre-installing other voice assistants alongside its own voice AI. Another concern raised by the FCO is that GAS licensees are required by Google to set its bundled services as defaults or display them prominently. It also objected to Google limiting or refusing to allow the interoperability of services included in GAS with third-party services.
At the time, the FCO said its initial view of Google’s GAS practices was that they did not comply with Germany’s competition rules for large digital companies — which give the FCO more room to intervene when it suspects competition is being harmed .
“In particular, we are critical that Google offers its infotainment services only as a package, as this reduces the chances of its competitors selling their competing services as individual services,” the FCO said in the summer.
The regulator said it will now carefully examine Google’s bid to decide whether it resolves competition concerns by offering a sufficient level of separation of its own services from the in-car infotainment platform.
“We are particularly concerned about the mandatory bundling of services with high market power and appeal with services that are less powerful. This behavior in particular can result in expanding market power and strengthening ecosystems. is a particularly problematic way of ‘penetrating’ markets,” said FCO chairman Andreas Mundt. Press release to announce the Google offer on Wednesday. “It could reduce competitors’ opportunities to sell competing services. We are now going to look very carefully at whether Google’s proposals are capable of effectively ending the practices that have raised concerns.”
The remedies Google has proposed to address the FCO’s competition concerns are to separately offer three additional products: Google Maps OEM Software Development Kit, Google Play Store and Cloud Custom Assistant, in addition to the GAS product bundle — which says that it will allow vehicle manufacturers to develop a map and navigation service with functions equivalent to those offered by Google Maps.
The addition of the Google Play Store will also allow end users to download a wider selection of third-party apps, reducing concerns about them being pushed to use Google apps. Cloud Custom Assistant is described as “a proprietary AI voice assistant solution” for use in vehicles to enable car manufacturers to offer competitive assistants.
The tech giant has also proposed scrapping the contractual provisions it imposes on the sharing of ad revenue, provided its own Google Assistant voice AI is exclusively pre-installed on its GAS infotainment platform.
“Google is also prepared to remove its contractual provisions regarding the designation of Google services as default applications or their prominent display on the infotainment platform,” the FCO also noted. “Finally, Google is ready to allow licensees to combine Google Assistant services with other maps and navigation services and provide the technical prerequisites to create the necessary interoperability.”
“Based on the results of market checks the Bundeskartellamt [FCO] will decide whether Google’s proposals are generally capable of alleviating the concerns raised. The question of whether Google’s proposals will lead to an unbundled offer of Google services in the automotive sector will be decisive in this context,” he added.
Google has been contacted for comment on its proposals.
The tech giant’s business was designated as subject to Germany’s special anti-trust regime in January 2022. Since then, the FCO has extracted a number of concessions from it on how it operates — including, this autumn, securing an agreement to a reform of Google’s data terms under which it will give users more choices about how it can use their information. Last year, Google also offered to limit how it shows news content licensed from third-party publishers in search results, in an effort to address the regulator’s concerns about self-preference.
The restart of German digital competition only applies to designated tech giants locally, in the market — although companies may choose to implement product changes globally to manage operational complexity (as, for example, Meta did this summer with the launch of a new account center that allows users to opt out of cross-site tracking, following an intervention by the FCO, which the company says will be rolled out globally).
The European Union recently implemented its own anticipatory competition review, in the form of the Digital Marketing Act (DMA), which targets the so-called gatekeepers of the Internet. So the FCO’s impositions on Big Tech offer a glimpse of the types of action likely to take place across the bloc next year when the deadline for compliance for the six in-scope DMA gatekeepers and 22 key services expires platform. list that includes Google Maps, Google Play, Google Shopping, Google Ads, Google Chrome, Google Android, Google Search, and the Google-owned video sharing platform YouTube.
Notably, the EU has not designated GAS as a core platform service — which may, in part, explain the FCO’s attention to it here, as competition regulators in the bloc work to avoid overlaps in their interventions. (Germany as a major car manufacturer is also likely to drive its oversight of Google’s car software and services.)
And while the FCO also opened a process on Google Maps in June 2022 that was (slightly) before the DMA was approved by the bloc’s co-legislators.
The EU-wide regulation, meanwhile, came into effect in May 2023. However, the deadline for DMA gatekeepers to comply is March 2, 2024 — so the full restart of the EU-wide Big Tech competition won’t be up and running until next year. Which might give the FCO reason enough to keep policing Google Maps in the meantime. (On this front the German regulator has also he said will continue to “work closely” with EU competition authorities to regulate the digital economy.)
From June 2023, the FCO said it will continue to investigate Google’s terms of use for the Google Maps Platform (GMP), saying its preliminary assessment is that the tech giant should end restrictions on combining its of GMP map services with third party map services.
“These restrictions may prevent competition between applications related to map services, such as those used by logistics, transport and delivery service providers, for example,” the FCO said at the time. “They may also have a negative impact on competition between services for in-vehicle entertainment systems by making it more difficult for map service providers to develop effective alternatives to Google Maps.”
Advance reforms to competition law in Germany and across the EU are aimed at curbing abusive behavior by digital giants that may further entrench their massive market power — with European regulators hoping these more proactive interventions they can do a better job of correcting imbalances in the digital economy than classical competition enforcement has been able to achieve. (A relevant example of classic enforcement is the $123 million fine imposed on Google by Italy’s competition watchdog in May 2021 for restrictions it had placed on a third-party app maker through its Android Auto in-car software.)
