A little over one year ago, the EU’s antitrust watchdog alerted Google that it was opening investigations into potential anticompetitive conduct concerning its Android mobile Operating System (‘OS’). Yesterday, the EU Commission laid down its formal antitrust charges. Below, we take a look at some of the background and possible consequences of this important case.
The rise of Android
When Google purchased Android OS in 2005, the smartphone market was still underdeveloped. Apple’s iphone release was 2 years off (2007), and the dominant devices were running highly impoverished operating systems such as symbian and Blackberry OS. Now 11 years later, Android makes up more than 80% of smart device OS’s in the EU, with Apple now trailing far behind.
As in the case of Microsoft (2007), Google has been charged with, inter alia, ‘tying’ the supply of its OS with the mandatory pre-installation of certain key software applications, such as Google Search and Google Chrome. In the case of Microsoft, such mandatory tying was considered anticompetitive due to the chilling effects on the downstream application market. However, Android is distinguished from Microsoft’s Windows by its unique ‘open source’ status.
Anti-competitive open source software?
One fascinating wrinkle in the Google Android investigation is that Android, unlike Microsoft, is ‘open source software’. What this means is that device makers have the theoretical ability to create their own Android-based OS’s independent of the version offered by Google (referred to as ‘forking’). Such a possibility would have the effect of neutralising any real dominance that Google has in the mobile OS market, and considerably weaken Google’s alleged ‘tying’ strategy.
However, the Commission’s ‘Statement of Objections’ claims that Google has prevented its customers from forking Android, by use of an ‘Anti-fragmentation Agreement’. Although presented as a means of maintaining interoperability and cohesion in the Android ecoystem, the Commission views this Agreement as an illegitimate restriction of competition as it prevents the emergence of competing Android-based mobile OS’s.
Android as ‘technological infrastructure’
Despite the meagre details provided by the Commission’s Factsheet, the legal argument against Google will almost certainly be based upon ‘abuse of dominant position’ under Art 102 TFEU. Unlike the still ongoing Google online search case, which seems to be formulated in terms of 'self-preferencing', the Android case presents facts much closer to the Microsoft case.
In a recently published article called 'Taking technological infrastructure seriously', I develop the argument that super-dominant software and hardware platforms play an analogous economic role to ‘infrastructure’, by serving as conduits for downstream value creation. As with traditional infrastructure, I argue that there are compelling legal and economic reasons for these platforms or ‘technological infrastructures’ to operate under ‘open access’ rules. Such rules would mean that all downstream companies (including the infrastructure owner) are given equivalent access terms to the upstream platform, unless there are very good (and objective) reasons not to.
The strength of Google’s legal arguments will likely depend upon how well it can formulate its reasons not to operate under an open access rule. Certainly, its first response will be to dispute its dominant position, given the dynamic constraint of Apple’s iOS as well the open source nature of Android. It may also make the affirmative defense that its control over forking and App pre-installations (to prevent ‘fragmentation’ across the Android ‘ecoystem’) is ultimately in the consumers’ interests. This last point (depending as it does on Android’s open source status) would also help to distinguish the case from the otherwise very similar facts of Microsoft.
As open source software continues to deepen its role in today’s high-tech markets, this case will no doubt have resounding consequences throughout the industry. One possible outcome would be to weaken Google’s hold over its flagship mobile OS, and pave the way for a flood of competing Androids. Whether this serves to sharpen the Google product (by competition) or simply create interoperability problems (by fragmentation) will be keenly observed by both legal scholars and technologists. With this much at stake, Google’s Android will no doubt remain a bit paranoid as the case proceeds.