Google’s Biggest European Headache Isn’t Search. It’s Android.

A week into Google’s dramatic skirmish with the European Union, search has drawn most of the attention. But it’s the other case from Brussels that may have Google more worried. The EU Competition Commission launched its investigation into Android in a move that could expose gaping blind spots in the tech giant’s ability to churn out innovation and profits. The EU is looking at three of its practices: Pushing exclusive pre-installations of its apps and services on devices; bundling them; and blocking modified versions of the software. The case is structured similarly to its earlier charges against Microsoft, which was subjected to $1.5 billion in fines for bundling its browser. Next to the search case, the commission’s new probe could have more teeth.

“The Android case is less advanced but, in a way, it’s a more conventional theory of what the Commission can do,” said Paul Lugard, a partner with Baker Botts who specializes in antitrust law. “I would not be very happy, if I were with Google, to hear that the Android case is going to accelerate.” Regardless of how the probe unfolds, its existence alone could hinder two pillars of Google’s plans for Android. First, there’s its future beyond phones: Android is increasingly steering into cars, TVs, wearables and other connected devices. For now, that expansion is even more restrictive than it is on handheld devices, with Google curtailing any potential customization of its software. And then there’s Android’s future in emerging markets. There, Google is aggressively trying to develop a more uniform version of Android and halt its fragmentation. It’s even pondering a side entry into China, according to the Wall Street Journal. The probe could derail that, as Chinese officials watch European developments closely. “Any plans that Google has to go into China are going to be hurt by this EU investigation,” said the former employee.