FTC Begins Investigating Google For Antitrust Violations Over "Home Screen Advantage"

The New York Times reports that the regulators of the Federal Trade Commission have a new target at Google: Android. Specifically, according to "two people involved in the [preliminary] inquiry," the FTC is looking askance at how Google treats its other software products and services (like Maps) in relation to the mobile OS. While Android itself can be bundled on phones, tablets, and other devices without charge, Google insists on a trade-off when it comes to its own services, like its app store, Google Play: to include access to those services, without which a typical Android device is far less valuable, hardware manufacturers must also include Google's designated apps (Gmail, Google Maps, and the Google search engine interface). Says the article: In recent months, a number of mobile application makers have complained to the Justice Department that this requirement — the “home-screen advantage” — makes it all but impossible for them to compete in a world where people are spending less time on desktop computers and more time on mobile phones. ... Since then, the F.T.C. has worked out an agreement with the Justice Department to investigate the claims, the people involved in the inquiry said.

Comments

Non-removable apps

[crow]

The problem isn't the requirement to include Google's other apps. The problem is that they're non-removable. If new phones came with just as much junk pre-installed, but if it were installed as if the user had downloaded and installed the apps themselves, then it wouldn't be a big deal.

Re:Non-removable apps

[Anonymous Coward]

No one was "forced" to use IE on Windows either, you could freely use Chrome, Firefox, Opera, Safari, and many others. Still the bundling was hit with a EU anti-trust ruling as an unfair advantage for Microsoft (and to pre-empt; no, the "integration" of IE in Windows was not in any way part of the EU ruling, only the unfair bundling advantage, just like this case).

What people don't seem to realize is that anti-trust regulation doesn't require the absolute monopoly situation you argue they don't have, it is a straw man. Anti-trust regulation says that a company is not allowed to use a dominant position (not monopoly) in one market to gain an unfair competitive advantage in other markets. So are Google (and MS and others) being penalized for being too successful? In a way they can be, yes, the rules are different if you are a market leader.

Re:Non-removable apps

[Zumbs]

If I pay for a phone, I *expect* to have the ability to remove any single program on it, and that is what crow was writing about. Phone manufacturers have choices, but it reeks of strong arming when wanting to include the largest Android app store results in a requirement that the manufacturer include a number of other apps *and* prohibits users from removing them. And yes, like it or not, while there are other choices, Android is in the same dominant position on the phone/tablet market as Windows is on the desktop market, and lack of access to Google Play is a deal breaker for many looking for a new phone.

Re:Non-removable apps

[Solandri]

The problem isn't the requirement to include Google's other apps. The problem is that they're non-removable.

They're completely removable. Just grab the AOSP release of Android. If you don't want to mess with compiling, the volunteers at CyanogenMod do an excellent job releasing pre-compiled binaries for most devices. Then you can run it sans-Google, or install the Google apps bundle if you wish (a lot of people want Android with the Google apps, but without the crud their carrier force-installs on their phone).

What's that? You don't want to go to all that trouble? Well Google went to all the trouble of making Android and releasing it in both open source and their proprietary versions. They're not charging you any money for their proprietary version - the only price they charge for you being spoon-fed is that the Google apps are bundled with it.

If Android were in fact a monopoly, how exactly would you propose breaking it up? By splitting the OS from the bundled apps. Except Google has already done that by making it open source. I don't know how more anti-monopoly you can get than releasing your entire OS as open source. The only thing stopping anyone from making or releasing their own version of Android without the bundled Google apps is literally their own laziness. What if Microsoft had released the code for Windows as open source? What if Standard Oil had released all the data and plans for finding oil and building your own drilling derrick? What if AT&T had released, free of all copyright and patent encumbrances, all the plans for making phones and switching exchanges which were plug compatible with their network?

The fact that Google releases an open source version of Android in parallel with their own version lets you see what's really going on here. Several companies have tried using AOSP to make their own version of Android - Amazon, Barnes and Noble, many Chinese vendors, and now Blackberry. None have been as successful as Google. That tells you that it isn't Android which is making Google's apps successful. It's Google's apps which are making their version of Android successful. Precisely the opposite of the FTC investigation's premise. Barnes and Noble's customers in particular begged them to add the Google Play store, which they eventually did.

Re:Non-removable apps

[Solandri]

No one was "forced" to use IE on Windows either, you could freely use Chrome, Firefox, Opera, Safari, and many others. Still the bundling was hit with a EU anti-trust ruling as an unfair advantage for Microsoft (and to pre-empt; no, the "integration" of IE in Windows was not in any way part of the EU ruling, only the unfair bundling advantage, just like this case).

There was a thriving market for web browsers which was developing in the early days of the web. Netscape (founded by the folks who made NCSA Mosaic) originally cost you $40. Then Microsoft pulled the rug out from that market by bundling IE for free - effectively using profit from Windows to subsidize development of their own browser and preventing any other browser maker from being able to financially compete with it. That's why Microsoft got tagged for anti-trust violations.

Re:Non-removable apps

[Kjella]

Unless and until you are "forced" to use Android for your phone's OS, you can't claim Google has a monopoly and therefore you have no right to complain about them having licensing terms of their choice for their products.

The focus on monopolies and anti-trust is an American thing, in the rest of the world it's usually called competition law. I don't know the US legislation but here in Norway they simply say "dominating position" and with a 40% market share as a typical minimum before they will intervene against anti-competitive practices. And in this case you're not even looking at the right market, Android users can't shop in iOS or WP stores. The alternatives are the Play store and a few third party stores that are well hidden behind warning signs that 99% of the market won't use. One of the practices that may be considered anti-competitive is:

"d) making the conclusion of contracts subject to the other parties accepting additional obligations which, by their nature or according to customary commercial usage have no connection with the subject of such contracts."

You want the app store? Well you also need to install our browser, mail app, map app etc. is exactly the kind of bundling this is supposed to prevent. Say there's one dominating supplier of fresh milk to your grocery store, the rest would have to ship from far away at great expense and not all that fresh. And the supplier says if you want our milk, you'll also have to exclusively sell our bread, fruit and vegetables even though there's plenty competition there. That's illegal. Then again, they have no problems with a McDonald's franchise regulating that you exclusively sell McD food under the McD brand. It's the context you do it in that determines if it's an anti-competitive practice or not.

Personally I think it's a close call, but if IE and WMP were anti-competitive enough to intervene at least here in Europe then I wouldn't be surprised if they could win. I'm kinda surprised they're testing this on Android and not the iPhone/iPad though, where Apple has a much more blatant anti-competition policy.

Apple does the same thing

[davidwr]

Only Apple does it whole-hog: They control the whole ecosystem (ignoring jailbreakers).

At least Google lets phone-vendors ship "just" the OS if they want to.

While I appreciate this investigation, the government shouldn't single out just Google.

Just one app

[crow]

What I want is a phone with just one pre-installed app: Setup. This setup app would recommend apps for various things like: App store, email, web, texting, contacts, camera, music, ebooks, etc. It would have recommendations for each, of course, but you could decide what makes sense for you.

They could still recommend all the same junk that they pre-install today, but without annoying their customers as much, while still getting some revenue from the app pushers.

This would also mean they wouldn't get complaints about using up so much of the built-in storage for the OS.

Having your cake and eating it?

[Crowd Computing]

I find this confusing. Competitors are complaining that Google has an unfair home screen advantage, but they still want branded Android? Why can't they just do what Amazon and the Chinese gadget manufacturers have been doing, create their own Android fork? I've seen Chinese tablets and smartphones themed to look iPhones, WinPhones or some even more horrible hybrid of both, and some of them are even exported with the internationally useless Chinese apps still intact.

FWIW I'm running Cyangogenmod 12.1 without any Google web-based apps. So it's possible to have a fully functional Android device without the Google imprimatur.

Counterclaim

[thegarbz]

What should serve as a very easy counter claim is the millions of Android phones on the market in China without and Googlisation at all. Claiming a phone is less valuable due to a lack of Google apps is just flat out wrong when you look at the Chinese market. The existence of several products in the west which ship with alternate app stores, and even whole Android platforms without google stuff pre-installed (e.g. Amazon's devices) should make this an open and shut case.

Re:Google needs to be kept in line

[thegarbz]

Not quite. You're free to distribute the phone with any app store that you want, but it must also include the Google Play Store. What Amazon wanted to do was ship Android with the Amazon app store as their ONLY store. And quite frankly screw em. You can't go to a competitor, strip their primary money maker, and then cry foul when they won't freely give you access to their apps.

I also see it as a good thing to force Google Play store to exist when preloading Google apps. At least that way there's a simple and clean update path for the individual apps. It's bad enough Android itself doesn't get updated when a new version comes out, the last thing we need is individual apps left behind in some buggy exploitable state.