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Finding Fault With the Low, Low Price of Android

bonch writes "Google's accusation of patent abuse toward its competitors has generated many responses, some of which have asked whether Android's free price is anti-competitive. Drawing comparisons to Microsoft's antitrust trial, in which they were accused of giving away Internet Explorer to drive competitors out of the browser market, Thurrott argues that Google's rivals are 'leveling the playing field' through patent fees by removing an artificial price advantage funded by monopoly search revenues. 'One could argue that Google is using its dominance in search advertising to unfairly gain entry into another market by giving that new product, Android, away for free. Does this remind you of any famous antitrust case?'"

35 of 364 comments (clear)

  1. This is why we can't have anything nice by Haedrian · · Score: 4, Interesting

    Its free. Lets be happy about it.

    Oh noes, its ruining my ability to sell stuff. Lets attack their patents to ruin it. Its got nothing to do with Microsoft's antitrust trial - that was something bundled with a sold product - this is something free which Google is using to sell something else (apps for example). Its kinda like how certain open source stuff works.

    1. Re:This is why we can't have anything nice by zero.kalvin · · Score: 5, Insightful

      The analogy is flawed, they can't compare Android to IE. IE was shipped with WinOS. WinOS was the more or less the only used OS out there ( I mean for the general population) , that's why it was anti-competitive to give for free ( or why it was anti-competitive by MS ). Now the case with Android is that it does not enjoy a monopoly, the hardware is diverse, and on the same hardware provider ( Like HTC for example) is offering different OS. If they want to offer it for free then it's not the Open Handset Alliance's problem, if others want to out compete Android, then they must offer something distinguished so that people will consider paying for it. It is the same more or less with Linux on the desktop.

    2. Re:This is why we can't have anything nice by rudy_wayne · · Score: 4, Informative

      The price of Internet Explorer was never the real issue. What created anti-trust problems for Microsoft was telling computer manufacturers that they couldn't install any other browser on the computers they sold.

    3. Re:This is why we can't have anything nice by unrtst · · Score: 5, Insightful

      Agreed, but more importantly (IMO), they aren't bundling Android with their "monopoly" produce of search.

      Microsoft didn't just give IE away for free... they took their dominant position of OS distribution, and bundled in a free-as-in-beer IE, AND (initially) did not provide any way to remove it. They also provided major "incentives" (read; deterrents) to hardware distributors to encourage them to only ship Windows.

      Google is not providing any additional incentives to handset makers who use Android. And many of those (ex. HTC) make just as many handsets that run other OS's, and push/market them equally. When Dell started selling some boxes with linux on them, it was only a couple, and they were underpowered; ditto for their no-os choices; and the price difference was not the equal of the cost of a Windows license.

      Google's offering is also free-as-in-freedom, which IE was not. You can argue about v3.0 if you like, but it's not officially in distribution yet, and the source to IE was never free.

      Also, when you go to google.com, you don't have to use Andoid, and it's not pushed on you either. A more comparative example - when a mobile user goes to google.com, they can still use the site just as well as if they came from Andoid. When a Netscape user went to Windows Update, it simply did not work - and still does not work - it requires IE.

      Can some similarities be drawn? Yes. Fortunately, by doing so, it should be obvious that they are actually making the right decisions with how to distribute this product, as opposed to the many anti-competitive choices that Microsoft made.

    4. Re:This is why we can't have anything nice by 93+Escort+Wagon · · Score: 4, Interesting

      I'd have to look it up to be certain (and who has time for that?), but I think the main complaint is that they intentionally designed the browser to be inseparable from the OS's GUI. So not only was it bundled with Windows, it was also impossible to remove. But in those days I'm sure they didn't think twice about strong-arming manufacturers to keep other browsers out as well.

      IIRC correctly there was additionally the complaint that Microsoft designed Windows to crash Netscape.

      Basically there were all sorts of different ways Microsoft was (rightly) accused of anti-competitive behaviors. Pick and choose your favorite.

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    5. Re:This is why we can't have anything nice by postbigbang · · Score: 4, Interesting

      And it was a lie; it was removable and not intrinsic to the operation of the OS. Microsoft just *wanted* it that way after standing on the shoulders (and farting on the head) of Netscape.

      The overall argument doesn't hold water. Free is fine. There are other Linux derivates on smartphones and tablets NOW with a similar price. Does Google do other evil stuff? Yeah, including not defending Android from litigation foisted on its OEMs.

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    6. Re:This is why we can't have anything nice by sjames · · Score: 4, Interesting

      Exactly. Google in no way forbids Samsung or HTC from installing iOS on other phones in their product line. OTOH, APPLE forbids that. Also MS retained all rights in IE, they just happened to set the price at free. Google has GPLed Android. The practical difference is that they can't wipe out the competition and then jack the price up to $1000/unit on the existing product.

      This is nothing more than oxygen tank makers claiming that free air is an unfair infringement on their profits.

      That or they're well aware that their behavior is just short of mustache twirling and they are trying to talk their way into a good night's sleep.

    7. Re:This is why we can't have anything nice by HermMunster · · Score: 3

      You cannot lend any credence to Thurott, he's a long time microsoft shill. He's also a proprietard that believes there is no room for free. That in and of itself is an indication of his fanboism.

      Offering free in exchange for some other remuneration is at the heart of barter.

      Microsoft's trial and subsequent conviction had little to do with free and everything to do with other practices stemming from favorable pricing policy that excluded competition from entering the market. It went like this: if you include other products besides ours you will lose your special pricing, which would in effect place their product out of reach of the consumer. If they sold a computer without their OS then they'd charged for a sale anyway.

      It had nothing to do with free rather it was due to exclusionary practices. By then Netscape was free too

      --
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    8. Re:This is why we can't have anything nice by Aighearach · · Score: 3, Interesting

      No, being inseparable was their defense.

      The accusation was that they leveraged their windows monopoly to get an unfair advantage for their browser. They claimed it wasn't a separate software product.

      What is missing in this case is google using the search dominance to assist android. They seem to just be claiming that since google makes a lot of money, spending that money is an unfair advantage. It just doesn't pass the laugh test.

      If google was refusing to include iPhone in search results, for example, that would be equivalent to the MS case. Going from the MS case opinions, if google was putting iPhone results on the third page or something, even that would probably be okay. They're not prevented from getting any natural advantage from their monopoly, they're just not allowed to use it to de-facto prevent competition.

    9. Re:This is why we can't have anything nice by icebraining · · Score: 4, Interesting

      Google Search is a much, much less dangerous monopoly than Windows is or ever was, because they don't really have a way of locking you in. The cost of switching search engines is close to zero, while the same can't be said for OSs, especially since they have exclusive and widely used applications like MS Office.

      Google's dominance in the online advertisement market seems way more dangerous to me.

    10. Re:This is why we can't have anything nice by Q-Hack! · · Score: 3, Informative

      No, GP is correct. There were 'complaints' that Microsoft designed Windows to crash Netscape. Back in the late 90's, there were three security patches in a row that caused Netscape to crash. While there was no proof that Microsoft was doing it on purpose, that didn't stop the accusations.

      Those of us, non-conspiracy theorist, just chalked it up to the poor documentation provided by Microsoft on their ever changing system API's.

       

      --
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    11. Re:This is why we can't have anything nice by exomondo · · Score: 3, Insightful

      Sounds exactly like what Google's trying to do but failing to since the iPhone is still by far the most profitable smartphone out there.

      Not really, google doesn't care about the profitability of smartphones at all, all they care about is the advertising revenue generated by the platform. The profitability of the phone is irrelevant, what they want is marketshare, more eyes on ads, that's what makes them money and given their marketshare they are winning at that game.

    12. Re:This is why we can't have anything nice by Patch86 · · Score: 4, Insightful

      And Apple sells iPhones with iTunes & Safari pre-installed, and Microsoft sell Windows phones with Bing search tools and probably some mobile form of IE. What's your point?

      On an Android phone, I can install many different browsers (as many as anyone could care to programme). I can use Bing on it, and if Apple wanted to release an iTunes product (I don't know if they have), I'd be able to use that too.

      What we're talking about here is Google funding their software with a non-standard funding model (that is, using mobile advertising revenue rather than point-of-sale prices). There's nothing stopping the others companies doing the same (not least Apple, who we're told time and time again by their fans that they're slaughtering the competition in terms of market share, or Nokia, who were number one in market share for a very long time). They're all just complaining that their business model is being trumped by someone else's business model, and they want the law of the land to fix it for them- which is not what the law of the land is for.

    13. Re:This is why we can't have anything nice by Alistair+Hutton · · Score: 3, Informative
      It's in the EULA. It is forbiden to install OSX on non-apple hardware.

      http://en.wikipedia.org/wiki/OSx86

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    14. Re:This is why we can't have anything nice by grahamm · · Score: 4, Insightful

      Linux is free and Windows has to be paid for. So using this same argument, Linux should be the dominant PC Operating System, but it is not - Windows is. Therefore being free cannot be the only reason an OS is the dominant one.

    15. Re:This is why we can't have anything nice by hey! · · Score: 4, Informative

      You're not incorrect, but you are missing the point.

      What's at issue isn't whether primary monopoly (desktop OS or search) is legally obtained. What's at issue is whether once obtained that monopoly is used to gain monopolies in other markets.

      The issue with the browser isn't primarily the price; it isn't even really whether or not IE was an intrinsic and inseparable part of Windows. The issue in the Microsoft/Netscape case is whether MS used its desktop monopoly power to take control of the market Netscape was in. There's documentary evidence that this was Microsoft's intent.

      So the analogy's validity hinges on this question: did Google use its search engine monopoly to enter the mobile OS market or eject other players from that market?

      I think the answer is no. Google doesn't prevent other mobile OS's such as iOS from using Google services, and the APIs for Google services are open and documented. Google search is the primary search engine on my iPod touch, and GMail, Google Maps and Google Earth all work fine on it. Nor are users of Android devices tied to Google services. One of the hallmarks of Android's architecture is how easy it is to replace built-in services like contact management. It is possible that some handset makers may be tied to Google's services contractually as part of an Android co-marketing or technical support agreement, but if they don't want Android they aren't barred from Google's search. And if they wanted to go their own way entirely, say make a Microsoft service-centric Android phone without Google help, they could, although they'd have to stay clear of using any Google trademarks.

      Having a monopoly in one area does restrict you in others, but not to the point where you have to price and package your products to suit your competitors. It just means you can't use that monopoly to bar access to the market to your competitors.

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    16. Re:This is why we can't have anything nice by nevermore94 · · Score: 3, Interesting

      Apple has not released iTunes for Android, nor do they currently intended to. I think this is where they are making a huge mistake. They are so focused on making iTunes an exclusive feature of the iPhone that they are missing out on all of the revenue that they could be generating if they also made an Android version. It is no different than making a Windows version of iTunes as well as a Mac version. Where do you think iTunes would be if they had left it only available on Macs? So, now I buy my music from the Amazon MP3 Store and I have not bought anything from my Windows iTunes since getting an Android phone. One more customer lost and a lot of song purchases.

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      Nevermore.
  2. Giving away, not bundling by Superken7 · · Score: 4, Insightful

    I assume that the author quoted in the summary refers to Internet Explorer, which was bundled and forced down the user's throats, as you could not even uninstall it or the Operating System would stop working.

    How can this be compared to Android, which is just an open source project? CHOICE remains, as far as I know.

  3. Gee, another Microsoft shill by HBI · · Score: 4, Insightful

    Haven't we seen enough of these paid shills over the years to understand their point of view? They get paid money by Microsoft to influence opinion so that Microsoft can sell more stuff. They are corrupted by the money, so it isn't an honest opinion. Therefore, why pay attention?

    I suppose some variety from the usual Florian dreck is nice, though.

    --
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    1. Re:Gee, another Microsoft shill by Haedrian · · Score: 4, Funny

      "win super site . com"
      "Supersite for Windows"

      Come now, this website sounds very reputable and not at all biased on the side of Microsoft.

  4. "Free?" by BeaverCleaver · · Score: 3, Informative

    Isn't this a free-as-in-beer vs. free-as-in-speech argument? I may be way off-beam here but I think Android is open source and IE isn't. So no, this would be nothing like the MS antitrust case.

  5. Obviously not the same by hilather · · Score: 4, Insightful

    While Android may be free (if you exclude the price to use the android market) it is still very different from the Internet Explorer case. Internet Explorer is bundled with the Windows operating system, so its installed already whether you like it or not. Android is a choice by the manufacturer and a relatively cheaper choice then the competition. Manufacturers CHOOSE to use Android, and consumers CHOOSE to use Google for their search queries. Nobody is being forced into anything.

  6. Terrible by DanTheStone · · Score: 4, Insightful

    Thank you, Slashdot, for informing me of a website I never, ever, want to read again.

    1. Re:Terrible by derGoldstein · · Score: 3, Funny

      Wikipedia isn't that bad...

      --
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  7. Re:open source attack by icannotthinkofaname · · Score: 4, Insightful

    Agreed. I'll believe these claims about Android being anti-competitive when those same accusers also declare intention to sue entities like Canonical, who also give away superior software for free on a regular basis.

    --
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  8. Re:At least one big difference by throbber · · Score: 3, Insightful

    Is it? I've been trying to find a recent source release for Android .....

    I think the best you can say is that Android *was* open source.

  9. Is Google Search a monopoly? by chrb · · Score: 3, Informative

    This entire proposal rests on the assumption that Google has a monopoly in search. Does it? The latest figures show Google Search has 63.6% of the market. What percentage of the desktop market did Microsoft have in the nineties when it decided to tie Windows and IE together (in violation of its 1994 settlement with the DOJ)? I'm sure it was at least 90%.. Apparently it was news in Dec 1998 when Windows marketshare dropped below 90% "for the first time"...

    There's a big difference between Google's 63% and Microsoft's >90%.

  10. 'anticompetitive' by roman_mir · · Score: 4, Insightful

    In today's world there is only one meaning of the world 'anticompetitive', and it means: didn't pay the politicians enough to be left alone to do business as one sees fit.

    So what if somebody is giving away free product? How about a free OS altogether? If they can do this and not go out of business, they should and consumers are the winners, not losers in this game. If the competition can't do anything about it, then it sucks for the competition. If the competition goes out of business because of it, it sucks for them. If eventually the company has to push prices above 0, this will just signal the market that there is a possibility to compete on non-zero price again.

  11. Re:Exactly by thegarbz · · Score: 3, Informative

    I don't think the article or summary writer actually know how anti-trust works. IE being free wasn't what caused the anti-trust case, it was the fact it was bundled to a product that was already considered a very strong monopoly in the market.

    About the only thing that could make Android an anti-trust case is if advertisers were forced to use an android phone to create and administer their ads on Google's services.

  12. Re:Android and rain by phoenixwade · · Score: 3, Insightful

    Lets make collecting rain illegal.

    It IS, in some western states, illegal to collect rainwater. http://www.popularmechanics.com/science/environment/water/4314447

    --
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  13. Shill by srh2o · · Score: 4, Informative

    Paul Thurott is an unabashed shill. Nothing to see here move along

  14. Re:Internet Explorer by TheRaven64 · · Score: 3, Interesting

    IE6 was the version of IE released after the browser wars. IE 2 was useless - it came on my NT4 CD and crashed on startup on a clean install. IE3 was okay. I had it and Netscape installed, and usually preferred IE3. IE4 was bad, but not quite as bad as Netscape Communicator 4, which was just plain horrible. IE5 was what IE4 should have been, and Netscape was dead at this point. IE6 cleaned up IE5 a bit. And then we had a long wait for Mozilla to get into a useable state.

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  15. Re:At least one big difference by derGoldstein · · Score: 3, Insightful

    This could actually make a dangerous precedent. If you give out free (as-in-beer) software, you're accused of dumping? So Flash, Acrobat Reader, anti-virus software, Quicktime, Paint.Net, and the Opera browser are all guilty? I really hope that if someone actually makes such a case, it'd be shot down instantly.

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  16. Bing too! by kirkb · · Score: 3, Interesting

    If Android is anticompetitive, then Bing most certainly is. Microsoft entered online search and advertising for the sole purpose of using its OS monopoly and buckets of cash to deprive others (specifically Google) of revenue. Proof? Losing more than $8Billion over the past 6 years isn't "trying to get a foot-hold". It's dumping. It's bundling. It's taking a dump in the pool so that nobody can swim there anymore.

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  17. The lie is so easy to detect it shows the shill by SmallFurryCreature · · Score: 3, Interesting

    This is a shill article because the lie is so fucking obvious to detect. First of all, Android is made by the Open Handset Alliance. Google is of course a very major player in it same as Nokia was a major player in Symbian BUT it is called an alliance for a reason. Google doesn't work on it alone.

    Second, and this is the big whopper. Where do you think MS gets the money from to fund WM7? If it had to charge full market price the handsets would cost a fortune because it would have to pay for ALL the losses of all the previous windows mobile versions. The constant rename campaigns alone would set you back a hundred bucks per license.

    MS is using its monopoly on the desktop and office software market to fund its other operations, from the original x-box (which was economically a dismall failure) to MS phone software which so far has NOT had the kind of sales to pay for its own development costs.

    And Apple? Same deal, no upstart company could have done the iPod whose profits were used to then launch the iPhone and then the iPad. The major advantage Apple always had over smaller players is that thanks to its massive reserves it could place orders so large that it got discounts nobody else gets making their players cheaper by comparison (MB for MB).

    So basically Google and a LOT of other players pooled their resources to create a product they could all benefit from and made it available for "free". So? MS used its monopoly resources to create a product nobody else can use for free. Apple used it fast wealth to create a product nobody else can use or even create gadgets for without paying them and they often just refuse to license stuff.

    Who is being the bad guy again? Oh of course, Google for being less evil. What people forget about Googles "Don't be evil" slogan is that doesn't say "Be good" it just means don't be as evil as the rest... and in American Business, that is a pretty low standard.

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