The European Commission case against Android threatens the only viable hope for affordable high-quality smartphones
Paul MacDonnell, Executive Director, Global Digital Foundation
European Commission allegations that Google is using its Android smartphone platform to squash competition against its own apps and to extend dominance in internet search do not add up. The accusations are that, by requiring smartphone manufacturers to preinstall its apps, Google Mobile Services (GMS) — which include Google Search — only on Android-compatible phones, Google suppresses apps that compete with GMS. The Commission has, to put it mildly, got the wrong end of the stick.
All cases alleging abuse of market dominance must start by defining the relevant market — where “relevant” means relevant to the choices available to consumers in that market. This, the Commission has failed to do. It begins by defining three markets for Android and GMS, “general internet search services”, “licensable smart mobile operating systems”, and “app stores for the Android mobile operating system”. For the first of these, search, the relevant market is Google’s advertisers and not smartphone users. Internet search services are offered for free and are, therefore, no more a “market” for their users than free inflight magazines, also paid for by advertisers, are to Europe’s air travellers. This makes search — along with inflight magazines — part of a market in which Google competes for marketing expenditure and which, in 2015, was estimated to be worth $924 billion. Media spending that year was estimated at $498 billion of which Google earned $67 billion — about 13%. Even in its relevant market, advertising, Google search is not dominant.
Users of smartphones will also struggle to recognise “licensable smart mobile operating systems” and “app stores for the Android mobile operating system” as markets that are relevant to them. The market they recognise is the European smartphone and tablet market where they spent an estimated £19.8 billion on devices in 2014 and where most of the €150bn they paid, often to national mobile oligopolies, was for smartphone contracts.
The charge that Google’s policies prevent other apps from competing with GMS are demonstrably untrue. Manufacturers are under no pressure to exclude apps that compete with GMS and most Android phones include them.
So what is Google trying to do with Android? The world of software operating systems has two models, proprietary and open source. Proprietary systems, like Apple OS X and Microsoft Windows 10, are developed and owned by individual companies which use their ownership rights to prevent third parties from changing them.
On the other hand anyone can download open source code and do what they like with it. Because it is free developers can scale it, implement it in any size of organisation or network, without paying licence fees. This has made open source systems attractive for major projects. Linux, MariaDB and Apache, are the open source systems behind some of the internet’s most important infrastructure.
A big downside of open source — and especially systems which, like Android, are platforms for third-party applications — however, is that engineers are incentivised to alter, or fork, its code as a cheap way to get it to do what they want. The incompatible versions they leave in their wake can, in the case of platforms, stop third-party software that depends upon them from working. The demise of two well-known open source platforms, Unix and the smartphone operating system, Symbian, was caused mainly by a lack of any governance that could prevent forking and fragmentation. This explains Google’s dilemma with Android. One fifth of Android installations are forked, and fragmentation, caused by failure to install updates, is also widespread. This degrades the performance of phones and stops important features and apps, both Google’s and its competitors’, from working. And it is a live issue in Europe. Samsung has been sued by the Dutch Consumers Association for failing to update 82 percent of its phones in the Netherlands.
To deal with these threats Android requires a voluntary counterpart to Apple’s and Microsoft’s proprietorial rules, namely the adoption of effective governance systems that prevent forking. The world’s only successful open source projects, including Linux, Perl, Python and Apache all, despite open source’s freewheeling image, do exactly this. Without groups of individuals to curate them they would go the way of Unix and Symbian. Google’s terms for installing GMS are aimed at saving Android from this fate. A forked and fragmented Android is certainly a threat to the success of Google’s apps on Android smartphones. But only because it is a threat to all apps — threatening, in particular, to rob Europe’s predicted €63 billion app economy of a stable and open platform where it can thrive. It is also a threat to Android’s promise of powerful and affordable alternatives at the luxury end of the smartphone market.
Finally, the case is music to the ears of Google’s competitors who, tellingly, are its strongest supporters. By ignoring the overall smartphone market and, inexplicably and without context, focusing on some of its disaggregated elements — “search”, “mobile operating systems”, and “app stores for Android” — the Commission is like a food critic who, reviewing a restaurant he has not been to, chooses instead to taste a few raw ingredients used in its kitchen that have been sent to him by its competitors.
This article draws on Paul MacDonnell’s analysis “Android is a Platform, not a Commons” published on Global Digital Foundation. The views expressed in this article are those of the author and not those of the Global Digital Foundation which does not hold any corporate views.