Photo/Illutration A Google sign (Asahi Shimbun file photo)

The Fair Trade Commission is investigating whether Google LLC forced smartphone makers to favor its search and other apps at the expense of rivals in violation of the Anti-Monopoly Law.

“We suspect that a situation was artificially created that makes it difficult for consumers to readily use alternative search services, even if the quality of those services is substantially improved,” Osamu Tanabe, director-general of the FTC’s Investigation Bureau, told a news conference on Oct. 23.

According to the FTC, one problem concerns a contract that Google has concluded with some makers of smartphones that use the company’s Android operating system.

The contract requires its apps, such as Google Search and Google Chrome, to be installed and prominently placed on the phones before shipment.

In addition, the FTC said a different contract states that Google will distribute part of its revenue to the smartphone makers on condition that they do not install rival search services.

The FTC suspects Google has restricted the businesses of its competitors and partners with these contracts.

The antitrust watchdog said it will consider administrative punishment if a breach of the law is confirmed.

“We do not see Google products being widely used as a problem,” Tanabe said. “But if an influential company is allowed to illegally solidify its market power, innovation will likely be hampered, and consumers could be put at a disadvantage in the medium to long term.”

Google holds a 79-percent share of Japan’s smartphone search engine market, according to the Ministry of Internal Affairs and Communications. Yahoo is a distant second with a 20-percent share.

Google’s Japanese subsidiary said Oct. 23 it will cooperate with government and industry officials on the matter.

It also said Google is offering an option for users to customize Android smartphones based on their needs.

The FTC said it will accept information related to its probe into Google from third parties.

The commission’s anti-monopoly investigations have resulted in improvements in Apple Inc.’s payment system and Amazon.com Inc.’s transactions with suppliers.

Overseas regulatory authorities have already taken action against Google.

The European Commission, the executive branch of the European Union, slapped a record penalty of more than 4 billion euros (635 billion yen) in 2018 after concluding that Google forced Android smartphone makers to install its search app as a default.

In the United States, a trial started in September on the Justice Department’s lawsuit against Google. The suit says Google paid Apple and other companies to preset its search engine as a default on their smartphones in violation of the antitrust law.

(This article was written by Masayuki Takada and Naoko Murai.)

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