Per Bloomberg, search giant Google Inc. GOOGL is facing U.S. antitrust probe over concerns that the company's practices regarding its Android operating system (OS) constitute potential antitrust violations.
Per reports, The U.S. antitrust regulator, Federal Trade Commission (FTC) has signed an agreement with the Justice Department and has started an antitrust investigation into the way Google blocked rivals' access to the Android OS and is restraining competition. Google faces a similar investigation in the European Union.
Its rivals including Microsoft MSFT have complained that the search giant prioritizes its own services and applications on the Android platform while limiting others, thereby giving itself an unfair advantage to boost online advertising.
As per International Data Corp., Android kind of monopolizes the mobile operating system market as it commands about 59% share of the U.S. smartphones market. Apple's AAPL iOS holds 38% of the market share while Microsoft’s Windows Phone has only 2.35% share. Also, on most of the Android devices, Google services such as Google Maps, YouTube, Chrome and the Google Play app store are installed by default.
The FTC and Justice Department will examine whether this practice gives Google an unfair benefit over others and is potentially hurting competitor app developers and handset manufacturers.
But then again, in the competitive mobile operating system market, consumers have different ways of downloading and installing applications on their devices. So this makes it difficult to prove any competition law violation by Google. The investigation however is still in its early stages and the issue could end without going to court.
Google has a Zacks Rank #2 (Buy). Another technology stock worth considering is Amazon.com AMZN, sporting a Zacks Rank #1 (Strong Buy).
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