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

[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.