Photo/Illutration The logo of Google LLC at its headquarters in Mountain View, California (Asahi Shimbun file photo)

The Fair Trade Commission will order Google LLC to stop forcing smartphone makers to install only its search apps while excluding rival products before shipment, sources said.

Such requirements constitute a violation of the Anti-Monopoly Law, which prohibits unfair trade practices, the sources said.

It will be the FTC’s first cease-and-desist order against one of the four global technology giants, which also include Apple, Meta and Amazon.

Google faces penalties, such as fines, unless it follows the order.

The FTC took issue with two contracts that Google concluded with Japanese suppliers of smartphones that are based on Google’s Android operating system.

The commission concluded the contracts restricted the smartphone suppliers doing business with Google rivals, the sources said.

According to the sources, one contract requires smartphone makers to pre-install Google’s search apps, such as Google Search and Google Chrome, and place them prominently onscreen as a condition for allowing them to install the Google Play app store.

This requirement has been included since at least 2020.

The other contract requires smartphone makers not to install rival search apps as a condition for sharing part of Google’s advertising service revenue with the companies.

The FTC apparently believes that Google, which holds a 79-percent share in Japan’s smartphone search engine market, has made it difficult for consumers to choose rival apps.

The anti-monopoly watchdog has already presented a draft cease-and-desist order to Google. It plans to finalize the decision after hearing the company’s views, sources said.

The draft order calls on Google to cancel the contracts in question and take measures to prevent a recurrence.

Online search advertising accounted for about 60 percent of Google’s sales of around $307 billion (47 trillion yen) in 2023.

The FTC announced the outline of its findings into Google’s case and sought public input in October 2023 at an early stage of its investigation.

It has since applied the same approach to other cases involving digital platform operators.

In April, the FTC imposed administrative punishment against Google, saying it restricted provision of online search technology to Yahoo Japan Corp., which merged into LY Corp. last year.

At the time, the commission approved a corrective action plan submitted by Google under the Anti-Monopoly Law’s “commitment procedures” and did not issue a cease-and-desist order.

Overseas regulatory authorities have already taken action against Google.

The European Commission, the executive branch of the European Union, slapped a penalty of more than 4 billion euros (650 billion yen) against Google in 2018.

It concluded that Google forced Android smartphone makers to install its search apps as a default in violation of the EU competition law.

In the United States, the Justice Department filed a lawsuit against Google over smartphone search apps in 2020.

A federal district court in Washington ruled in August that Google has maintained a monopoly over internet search in violation of the antitrust law.

The Justice Department in November called on the court to force Google to divest its Chrome browser.

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