European Commission Issues Problematic Antitrust Decision Against Android

BY Heather Greenfield
July 18, 2018

Brussels, BELGIUM — The European Commission today issued an antitrust decision against Google with respect to its Android mobile operating system (OS). The decision alleges that Google’s practice of offering a suite of proprietary Google apps to device manufacturers gives an anti-competitive advantage to certain Google apps. It also considers anti-fragmentation agreements with device manufacturers, designed to ensure the stability of the Android ecosystem, in breach of EU competition rules. The Commission comes to the same conclusion on revenue-sharing agreements for Google Search.

The Computer & Communications Industry Association, which has frequently advocated on the government’s side of tech competition issues for more than 45 years, has followed this case with great concern. In this case it is clear that Android has brought more competition, product variety and innovation to the market. It is the most open, flexible and diverse mobile platform. It competes fiercely with Apple’s iOS, which the Commission seems to underestimate in its decision.

It is paradoxical for a competition authority to go after a company that has been one of the main pro-competitive forces in the mobile economy. Android’s success is a result of a delicate balance between its openness, flexibility and usability. Today’s decision puts this balance under strain which could have unintended, negative consequences – especially for consumers.

The following statement can be attributed to Ed Black, President and CEO:

“Today’s decision punishes the most open, affordable and flexible operating system in the mobile ecosystem. Android brought more competition, innovation, and consumer choice to the market. These are precisely the things competition authorities are tasked to promote rather than jeopardize.”

The following statement can be attributed to Jakob Kucharczyk, CCIA Europe Vice President, Competition & EU Regulatory Policy:

“The result of today’s decision is bizarre. It will make it more difficult to successfully compete using a free and more affordable open source business model. In a world where the iPhone is the main competitor, any company wanting to compete must ensure their ecosystem is as appealing as possible to attract app developers and consumers alike. It seems today’s decision lost sight of these big picture dynamics and misses the forest for the trees.”

“The mobile economy is thriving. Consumers have never had so much choice at the tap of a button, at competitive prices. Android has been one of the drivers behind this vibrant competition and innovation. To say that consumers are harmed because of a couple of pre-installed apps is to ignore the billions of app downloads every year. That in itself is testimony to empowered consumers exercising their freedom of choice made available by Android — not blocked by Android.”

Additional background information

Given that the Android OS is open source and distributed for free, the pre-installation of proprietary Google apps serves to recoup the costs of running and developing the OS. Device manufacturers do not have to pre-install these apps and when they decide to do so they remain free to also pre-install other apps, including those that directly compete with Google. This business model stands at the centre of an ecosystem that has consistently lowered device prices and left consumers with more innovation and choice.  

The history of the software and internet industry repeatedly shows that software fragmentation can bring an entire operating system down. Anti-fragmentation measures aimed at ensuring device compatibility are crucial for the stability and attractiveness of open source products such as the Android platform. They make sure developers do not have to custom design code for every version of Android. They ensure that apps continue to work whenever consumers change devices. They ensure interoperability within a highly diversified and rich platform which promotes competition.

The stability, diversity and flexibility of the Android ecosystem attracts millions of developers and consumers. A look at how consumers use this product would indicate Android is offering choices they like. Billions of apps are downloaded every year because consumers have ultimately the last word on which apps end up and are used on their devices.

For further background please also see CCIA’s letter to Commissioner Vestager.

 

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