The European Commission versus Android

https://stratechery.com/2018/the-european-commission-versus-android/

by denzil_correa • 8 years ago

126 129 8 years ago

galadran• 8 years ago

A pretty well written analysis. I think the author is mistaken on two important points though.

The author writes that due to Google Play Services, most Android apps are in fact Google Play apps and couldn't be used on a non-Google version of Android without a significant rework. I believe there's already a significant body of work on providing drop in replacements for Google Play Services, e.g. microG [1]. There is nothing that stops a manufacturer from providing microG instead of Play Services and hence cutting Google out.

Secondly, the author complains that:

More broadly, the European Commission continues to be a bit too cavalier about denying companies — well, Google, mostly — the right to monetize the products they spend billions of dollars at significant risk to develop.

There's a huge rift in how most Europeans and Americans see the role of regulators but without getting into that, I want to note Android was not Google's effort alone and hardly a significant risk. Android as a software stack is built on the back of the Linux Kernel and a dozen other open source frameworks (Java, sqlite etc). Equally, Google is hardly responsible for the hardware. Manufacturer's like HTC and Samsung invested far more in making Google a success than Google did. The same manufacturers that Google has been screwing over with its anti competitive practices...

[1] https://microg.org/

bmcusick• 8 years ago

More to the point, the EU didn't say "Google can't monetize Android". It just said that this tying arrangement between Google Search and Android is too anti-competitive.

Android could find other, more transparent and competitive, revenue models.

simion314• 8 years ago

Google does not even want or need to make money from Android they were/are afraid that iPhone and Windows mobile devices would not default to Google search, having all the mobile devices not defaulting to google gave them nightmares.

turbinerneiter2• 8 years ago

Imagine the EU would invest these 5 billions into funding microg, alternative app storrs and other drop in replacements for APIs and Apps.

megaman22• 8 years ago

What exactly would the EU be spending that money on? Where does this kind of punitive fine revenue go into? Is it the general slush fund, or is it earmarked for some purpose?

kbwt• 8 years ago

They would build a really nice app store and then it would sit empty because it is not preinstalled and the network effects of Google Play make it pretty much impossible to gain any traction for an alternative.

pluma• 8 years ago

Also I can't really muster any sympathy if a company is punished for having spent "billions of dollars at significant risk" to develop something intentionally anti-competitive.

That's like saying "but we spent a lot of money on really expensive lawyers to evade those taxes" when charged with tax evasion.

garmaine• 8 years ago

Why would google develop Android otherwise?

martinald• 8 years ago

I can't see how this microG is at all helpful. Sure it has a replacement to GCM but every app backend would have to be rewritten to support it. It's hardly a drop in replacement if every chat app doesn't support push notifications.

benwaffle2• 8 years ago

microG acts as a drop-in replacement for Google Play Services. Apps do not have to be rewritten

ucaetano6• 8 years ago

There is nothing that stops a manufacturer from providing microG instead of Play Services and hence cutting Google out.

Except that microG doesn't work. It is even far behind Amazon's own implementation of GMS, and Amazon has dumped piles of money into it.

The same manufacturers that Google has been screwing over with its anti competitive practices...

Surprisingly, the manufacturers aren't the ones filing the anti-trust complaints in this case. The case was brought initially by Oracle, Microsoft & company.

prepend• 8 years ago

But isn’t this reasonable since Samsung bringing up this lawsuit could be disastrous in harming their partnership with Google.

The Microsoft case wasn’t brought about by Compaq and Dell either even though they were being hosed [0]. While the case was brought by states and DOJ, there was lots of pressure from Netscape/Sun. Not really their hardware partners.

[0] https://en.wikipedia.org/wiki/United_States_v._Microsoft_Cor....

blub4• 8 years ago

It's very very simple to understand, but I do recognise your name from your repeated and tireless defences of Google and the morally bankrupt spyware/online ad business. And once again I'll have to correct some misconceptions.

Samsung / Sony / etc are companies with a lot to lose, and they correctly calculated that "better the enemy you know". Their entire mobile business depends on a good relationship with Google, so it's blindingly obvious that they won't bite the hand that feeds them.

Internally, they're probably throwing parties that the big bully is punished by the headmaster.

acct1771• 8 years ago

Is microG, and Yalp, usage not against ToS?

benwaffle2• 8 years ago

it is

VikingCoder• 8 years ago

hardly a significant risk.

Oh come on.

sweden• 8 years ago

The API of Google Play Services is not really open to re-implementation by third parties. The fact that microG exists doesn't invalidate the author's point. Google allows microG to exist because it is something of a niche, it is not threatening to their model.

The second point you are trying to make is not really clear.

stefan_• 8 years ago

There is nothing that stops a manufacturer from providing microG instead of Play Services and hence cutting Google out.

Except the contract ??

lern_too_spel7• 8 years ago

The contract is to get Play Services. If they don't want Play Services, they don't need the contract.

sonnyblarney3• 8 years ago

"hardly a significant risk"

Android is a massive, massive undertaking by any measure, and it doesn't matter that it uses Linux and other things.

"Manufacturer's like HTC and Samsung invested far more in making Google a success than Google did"

I totally disagree (edit: I disagree that they are spending 'massively more' but it's of course a lot) as most of what they are doing is commoditized, and the hardware aspects that they are actually competitive on ... those are differentiated in their models and they can capture the surpluses generated by that differentiation, which is to say those competitive aspects are not going back into 'Android' or any 'community' etc..

blub4• 8 years ago

Nope, Android v1 was a no-name product from a highly competent web service provider without any track record whatsoever in mobile OSes.

Unsurprisingly, it wasn't a good product, so it needed to be open source to gain traction, since no one in their right mind would pay for it. Furthermore, it needed the device manufacturers on board, since Google had zero mobile HW experience, as can be seen on how they handled their Motorola acquisition. So Google actually owes device manufacturers quite a lot. It couldn't have done it without them.

And you completely fail to appreciate how complex and important the Linux kernel is. Look at their Fuchsia effort: it was published in 2016 and was in dev for a couple of years probably. Still not ready for production. Now try to imagine what would happen if Apple had 3 extra years to develop iOS before Android was launched. Android would be stillborn. That's what Linux brought to the table.

ariwilson• 8 years ago

Putting billions of dollars and hundreds of engineers' time into Android for years rather than something else does seem like the definition of a significant risk to me. Not to mention all the legal issues.

s73v3r_18• 8 years ago

"There is nothing that stops a manufacturer from providing microG instead of Play Services and hence cutting Google out."

I would be shocked if 1). The licensing agreements with Google to get the Play Store in the first place allow that, and 2). If MicroG would be production ready. It might be fine for some enthusiasts and hobbyists, but I highly doubt it's ready to be shipped by default.

utopcell2• 8 years ago

Screwing over ? Manufacturers have made a ton of money selling $800 devices every couple years.

s73v3r_18• 8 years ago

One or two have. Most Android OEMs aren't making that much money, if they're making any at all.

IBM3• 8 years ago

Sundar Pichai in 2009 [1]:

Second, Google believes that the browser market is still largely uncompetitive, which holds back innovation for users. This is because Internet Explorer is tied to Microsoft's dominant computer operating system, giving it an unfair advantage over other browsers. Compare this to the mobile market, where Microsoft cannot tie Internet Explorer to a dominant operating system, and its browser therefore has a much lower usage.

By the way, I think it's absurd for Google to threaten that they may now charge a license for Android [2]. They're effectively saying that now that they've eliminated all competition over the past 10 years and achieved a dominant share of the market, they're going to raise prices. That's a slam dunk case even in the US's broken antitrust system.

[1] https://publicpolicy.googleblog.com/2009/02/browsers-powered...

[2] https://www.theverge.com/2018/7/18/17585396/google-android-e...

lern_too_spel7• 8 years ago

The majority of Android phones (including all Samsung phones) have other browsers preinstalled.

mtgx• 8 years ago

Relevant from 2014:

https://www.androidcentral.com/theres-reason-youre-seeing-mo...

mgiannopoulos• 8 years ago

Replace "browser" with "app store" and you arrive where the parent comment was going.

glitchc2• 8 years ago

This graph is telling:

http://gs.statcounter.com/browser-market-share/mobile/worldw...

Subtract the iOS market share from the overall base, and is at 75% market share of remainder. The only strong competitor is UC Browser at 13.3%. This is an AliBaba product localized to mainland China. Remove that from the global market, and we end up with ~90% share for chrome in the rest of the world. That's antitrust territory.

beenBoutIT• 8 years ago

IIRC, these browsers are generally impossible or next to impossible to get rid of.

mrep2• 8 years ago

Well, the bundling has been there since day one so it's not like they are really raising prices. If the EU won't let google make money for android through search, then it seems reasonable to me for them to shift their revenue generation through licensing.

trocadero• 8 years ago

I think the analogy of Google's castle being search and everything else a scorched earth tactic to protect that is perfect. It's the heart of my strongly ambivalent feelings about Google. If you take their major successes like Maps, Android, Chrome, GMail, Analytics they are all really good products. They aren't examples of a monopoly giving bad service or forcing an inferior product on consumers.

The problem is that it sucks the oxygen out of the room for so many fundamental technologies that we use today. How do you compete with the combination of massive resources and a willingness to give away things for free?

kodablah4• 8 years ago

Honest question, not tongue in cheek, if there's an instance where consumer utility and ability to compete are opposing forces, which do we side with? And if, as I suspect, it is nuanced and not a binary answer, do we ever consider one of the forces while trying to increase the other? Should the one doling out anti-competitive punishments be required to recognize consumer utility/happiness? Should the one implementing consumer utility/happiness be required to recognize its competitors' abilities? To me it seems the requirement to recognize the other opposing force is only on the implementer.

olau• 8 years ago

I think the law is there to protect competitors, and that's it.

Why the law is there is of course another matter.

It's like if you go out and kill someone. That person may have been a really, really horrible person that our society is measuredly better off without. But unless there's some kind of self-defense involved, you're facing a sentence to prison.

I'm not trying to equate killing with monopoly abuse, but I find it odd that the principle that if you break the law, you face the consequences results in so much questioning.

These cases are meticulously prepared and come from complaints filed with the authorities. If you read all the paperwork, you'd most likely come to the same conclusion: Google abused their dominant market position.

simosx• 8 years ago

Being pedantic here. It is in fact versus "Google's current business plan of Android", not Android per se.

kodablah4• 8 years ago

Still, it is an unsatisfying remedy: Google built Android for the express purpose of monetizing search, and to be denied that by regulatory edict feels off; Google, though, bears a lot of the blame for going too far with its contracts.

This could be seen another way. Instead of going too far with its contracts, i.e. limiting the supplier side, the results of these regulations should entice future companies to not go too far on their distribution, i.e. limiting the demand side.

If it becomes clear that having a dominant position in a market can be problematic, a reasonable company might do things to prevent it from happening including limiting growth, raising prices, stymying third-party ecosystems/distributions, and reducing feature investment. It can be argued that these punishments are predictable and easily avoided with self regulation, we just need to be sure we're happy with the forms this self regulation may take. Being in a dominant position is rare for sure, but in these rare cases, if I had a choice, I'd do everything I can do be just under dominant.

Google might want to start realizing this with Chrome and surreptitiously support (...er...keep supporting) Firefox or not implement too many features before others can catch up.

enitihas7• 8 years ago

Seeing this entire thing fold out, it seems the best monopolies for a corporation are the legal monopolies(like iOS), where there are still very high barriers for customers to switch, but you aren't dominating any well defined market segment.

lotsofpulp• 8 years ago

Dominating the market segment of people with greater than median average disposable income seems to be best strategy.

s73v3r_18• 8 years ago

I'm not willing to trust companies with self regulation.

kodablah4• 8 years ago

Sure. Not sure how that's related to the comment though.

enitihas7• 8 years ago

While I understand that the law is not required to be a mathematical statement and requires case by case interpretation, I wonder if these leaves several burning questions on the table: 1. Was it illegal for apple to force install apple maps on iOS users, stiffling competing maps apps? 2. Is it illegal for apple to not provide other browsers JIT capabilities, effectively forcing them to be a skin on top of Safari?

I understand that iOS has no market dominance. But if iOS reaches 60% shares in a country, can the country demand substantial changes to iOS to encourage competitors? 70%? 80%?. Does a company need to make its product more open as it starts dominating the market.

Also, how would such market segments be defined for market domination? Phones? Smart phones? Phones with a particular characteristics? Phones with a particular OS(as phone inter operability is widely within OSes only)

As the press release of the commission says "market for .... licensable smart mobile operating systems and app stores for the Android mobile operating system.". It seems using this vocabulary even Apple can be branded a monopoly, dominant in "unlicensable smart mobile operating systems and app stores for the iOS mobile operating system". Then isn't even apple using their dominance of "app store for iOS" to dominate other market segments?

cageface2• 8 years ago

As Apple enthusiasts love to point out, a huge chunk of Android sales are low end feature phone replacements. If you exclude those then the two platforms are much closer to parity in marketshare. And Android's hold is precarious. Pretty much only Samsung is making any money on Android and even they are seeing declining sales for their flagship phones. I'm convinced if Apple ever offers a decent (not iPhone SE) iPhone at around the $300 price point it will be a bloodbath for Android OEMs.

I'm convinced this decision will one day seen as a mistake by the EC. Hopefully it won't destroy what is a now a healthy & competitive marketplace with a lot of meaningful choice for consumers.

enitihas7• 8 years ago

Exactly, this decision will benefit apple a lot, as they would be free to integrate their platform and offerings in all sorts of ways, continuing to charge their premium, where as the "dominant" mobile OS will have to keep itself open and not force anything on users or makers.

paganel• 8 years ago

iPhone SE is a more than decent phone, I’ve paid around 330 euros this winter for one, it does its job pretty damn well (good photo camera, reasonable hard-disk space, I do not perceive it as slow).

earenndil• 8 years ago

if Apple ever offers a decent (not iPhone SE) iPhone

What's not decent about the SE?

krn2• 8 years ago

But if iOS reaches 60% shares in a country, can the country demand substantial changes to iOS to encourage competitors?

In fact, iOS market share in Switzerland is 65%[1]. It's also more than 51% in Norway, Sweden, Canada and Australia.

[1] http://gs.statcounter.com/os-market-share/mobile/switzerland

skrowl• 8 years ago

How are they escaping EU regulation about monopoly bundling (basically all the same things Google is accused of in this judgement?)

They basically do the same thing (sometimes to an even greater extent) when it comes to bundling their own software with their hardware.

s73v3r_18• 8 years ago

No, because in these instances, it's Google forcing the other OEMs to bundle or not bundle things. Apple has no other OEMs, thus they're not competing with their other manufacturers.

dogma11383• 8 years ago

Google doesn’t force OEMs to use Android, they are free to develop their own OS.

mrep2• 8 years ago

Maybe not OEMs, but apple is forcing their apps on customers.

JumpCrisscross3• 8 years ago

Not bad timing for Norway's Opera's end-of-July IPO [1]. (Not suggesting any nefarious intent on the EU's end.)

[1] https://seekingalpha.com/article/4187253-first-look-operas-1...

notreallyauser• 8 years ago

Norway is not a member of the EU.

izacus• 8 years ago

It is a member of EEA though and this ruling affects them.

SyneRyder• 8 years ago

I thought Opera was sold to a Chinese consortium (Kunlun, Qihoo and Golden Brick) back in 2016? [1] [2] Apparently they kept the Norway office as the headquarters though, and the website makes little reference to the Chinese office and no reference I could find to their new CEO.

The Norwegian company that used to be called Opera Software is now called Otello Corporation - they also sold the name of their company together with the browser. [3]

[1] https://www.engadget.com/2016/07/18/opera-browser-sold-to-a-...

[2] https://newsweb.oslobors.no/message/406030

[3] https://www.crunchbase.com/organization/opera-software

utopcell2• 8 years ago

This is a well written summary.

From the article, the European Commission requires Google to respond to these three accusations:

1. Tying Google’s search and browser apps to the Google Play Store.

From the user's perspective, this is not even true. For example, Samsung devices ship with their own browser on the home screen [a]. The user has to seek out the Chrome app (that is pre-installed) in order to use it. Besides, Play, Chrome and Search are Google's products and they should be allowed to bundle them as they wish. Technically, they could be one app.

2. Paying OEMs to exclusively pre-install Google Search on every Android device they made.

This point is moot. Google no longer does that. In fact, unbundling the Play store from search will force a bidding war for the default search engine, which will end up with Google paying to add Search on a product they are giving away for free.

3. Barring OEMs that installed Google’s apps from selling any device that ran an Android fork.

This feels absurd to me. Google is under no obligation to offer an open-source version of Android in the first place. If they decide to retract the OSS version, which is well within their right, how exactly are OEMs restricted ? How is EU better off in that case ? Is EU going to _force_ Google to give away Android for free ?

[a] ..except in the US.

blub4• 8 years ago

DuckDuckGo posted some info on their twitter which completely obliterates your point 1.

Regarding point 3, I've said elsewhere why Android had [1] to be open source and why they can't easily [2][3] make it closed source.

1: https://news.ycombinator.com/item?id=17561391

2: https://news.ycombinator.com/item?id=17562074

3: https://news.ycombinator.com/item?id=17556971

The European Commission versus Android

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