Data Sheet—Thursday, April 21, 2016

For many Android users, one of the appealing things about Google’s mobile operating system is that it is an open ecosystem—anyone can install or modify it, since it is open source, and users can run any apps they want, something they can’t do on Apple’s iOS devices. But the European Union doesn’t see it that way. To the EU, Android is a just tool that Google uses to expand its mobile and search monopolies.

Tensions between the EU and Google have been brewing for some time, but they boiled over Wednesday, when the European antitrust regulator served the web giant with a formal complaint, saying it believes Google has “abused its dominant position by imposing restrictions on Android device manufacturers and mobile network operators.”

For an offense like that, the EU can levy penalties of up to 10% of a company’s global revenue, which in Google’s case could be as much as $7 billion. That’s a big stick.

The core of the case revolves around two complaints: 1) That Google requires manufacturers to pre-install Google Search and Google’s Chrome browser and make them the default, and also gives them financial incentives to make those services exclusive, and 2) That it prevents manufacturers from selling smartphones that run non-Google versions of Android, or penalizes them for doing so.

In many ways, the EU case against Google is similar to the U.S. antitrust case against Microsoft that was launched in 1998 and culminated in a large fine and other penalties. Much like Google, Microsoft was accused of using what’s called “tied selling” to force manufacturers to include specific pieces of software (the Internet Explorer browser, for example) with the Windows operating system.

One big difference in U.S. antitrust law is that the ultimate barometer of whether something is illegal is whether it negatively affects the consumer—for example, by raising the price of a product or service. That would make it difficult to prosecute Google for antitrust behavior, since the vast majority of its products are free. The European Union, however, doesn’t need to make that argument—it’s free to find Google’s behavior illegal regardless of what it costs.

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BITS AND BYTES

Caught in the middle. Three of the high-tech industry's longtime bellwethers—Intel, IBM, and EMC—reported less-than-stellar quarters this week, signaling a rocky start for 2016. Ericsson also fell far short of its projections for its latest report, as did Qualcomm. The root cause: Many companies are prioritizing investments in mobile technology and cloud services but spending hasn't yet caught up with intentions. (Wall Street Journal, Fortune, Reuters)

Apple will pay $25 million to settle lawsuit over Siri. The money will go to Marathon Patent Group, which owns the license to a 2007 patent covering natural language user interfaces for databases. The approach, similar to the one that underlies the iPhone voice assistant, was created at the Rensselaer Polytechnic Institute. The trial in the five-year-old case was supposed to start in May. (CIO)

Verizon strikers call for wireless boycott. The roughly 40,000 workers who walked off the job on April 13 mainly work in the telecommunications company's Internet and landline businesses, which represent a declining share of its annual revenue. Now they want consumers to boycott Verizon's wireless division, which generated almost $92 billion in sales last year. This morning the company disclosed quarterly results that undershot expectations, and it warned that the strike could be a drag on the current one. (Fortune, Re/code)

Amazon will help New York turn textbooks digital. The e-commerce giant has signed a three-year, $30 million contract to sell e-books to public schools in New York City. It's a huge boost for Amazon's burgeoning education business and for the role of information technology in U.S. classrooms. (Wall Street Journal, Fortune)

Microsoft calls it quits for Xbox 360. The company has sold more than 80 million editions of the game console since 2005, but sales have been waning as consumers embrace more current technologies. (Reuters)

Bill Campbell's memorial delays Apple earnings report. The tech giant will disclose its second-quarter results on April 26, one day later than scheduled. The change accommodates a memorial service for the late Campbell, former Intuit CEO, longtime Apple board member, and "Coach" to many Silicon Valley entrepreneurs, including Steve Jobs. (Fortune)

THE DOWNLOAD

PayPal just backed an investment app for millennials. Jeff Cruttenden had been investing since he was 11. As the son of an investment banker, he was taught as a teenager the value of growing money by investing in mutual funds and stocks. But when he arrived at college, he realized he was one of the few of his classmates who knew anything about investing. Most of his classmates didn’t invest their savings, and were overwhelmed with how to even get started.

That realization was the spark for Acorns, a year-old app designed by Cruttenden and his father to get people started by making small automated investments from a bank account. On Thursday, Acorns disclosed $30 million in new funding, with payments giant PayPal backing the startup. Japanese e-commerce company Rakuten also participated through one of its venture capital funds. (Fortune)

IN CASE YOU MISSED IT

Why Facebook has the most to gain from the EU's Google crackdown
by David Meyer

Intel's huge jobs cuts cap tough era for tech workers by Barb Darrow

AOL steps into virtual reality by Hilary Brueck

A wish list of features for Apple iOS 10 by Jason Cipriani

Google's Inbox email app gets more organized by Jonathan Vanian

Billion-dollar marketing startup Sprinklr extends reach by Heather Clancy

Michael Arrington steps back at CrunchFund by Dan Primack

Chinese backer of Faraday Future unveils electric car in Beijing
by Kirsten Korosec

ONE MORE THING

San Francisco will be among first U.S. cities to require solar on new buildings. The legislation takes effect next January, affecting commercial and residential construction over 10 stories tall. The California city aims to source all its electricity from clean energy technologies by 2025. (Fortune)