European Commission vs post-truth Google

In April, the European Commission issued a statement against Google for the way they promote and distribute their apps on the Android platform. Google answered last week with a public blog post, more like a marketing campaign, including a video, nice animated pictures and updated websites. Of course, as it’s Google responding, there are a lot of points “proving” the European Commission wrong.

Wait… If it is really proving, why make it a public marketing campaign and not just a letter to the European commission? Do you need to convince the public about something, if you can make points that convince the responsible people? Well, maybe the points they made are not that convincing to some people, so let’s check the details of this campaign.

Is Android competing with Apple?

The European Commission seems to somewhat assume that there is no real competition in the Smartphone market in terms of operating systems. You can’t even try to see BlackBerry OS, Sailfish OS, Firefox OS or Windows Phone as a competitor to Android, given they have no relevant market share, and Google seems to accept that (at this point).

But there is still a competitor that the European Commission claims is not: Apple’s iOS. While everyone knows that both mobile operating systems exist and you can’t have both, there are still a lot of reasons to argue that they’re not competing. First of all, notice that Google is licensing their operating system to other hardware manufacturers and bind these licenses to certain conditions. The European Commissions statement primarily is about these conditions, which somewhat makes the point valid again, because Android is the only licensable mobile operating system.

Google is licensing Android?

You might ask how Google is licensing Android, as you know that Android is open source.

While the point that Android is open source is not wrong, it is still only half the truth. Basically there are two Android operating systems. One is open source software, the “Android Open Source Project” (AOSP) and the other one is a proprietary modification and extension of AOSP and the only operating system that can legally be marketed as Android (I tend to call it “Google Android” for distinction). Whenever it suites, Google is eager to mention that Android is open source, but when it suites they also claim the features Google Android has and are not present for AOSP.

The fragmentation argument

Google claims that the European Commission underestimates “the dangers of fragmentation”. While it is true that fragmentation can be a problem, we reached a state where you actually have a problem when trying to fragment the market: Being incompatible to Google Android apps was one of the main reasons for most competitors to never reach any relevant market share. The other way round, this means that if you are compatible to Google Android apps, there is no reason to not provide more features so that apps can be written in a way that they only run on your “fragment” of devices. If you want to sell your app to a reasonable number of users and devices, you are unlikely to do this, but the freedom should be granted nonetheless. The relevant point you should take with you: We don’t need Google to ensure to us that we don’t reach a critical level of fragmentation, the market showed that it is capable to handle this. And if there is a new mobile operating system that is incompatible to Google Android, that is only showing us that the market needs such a product, a product without Google. This is what is called competition.

Interesting note here: Google stresses that their compatibility agreements are voluntary and in the same moment try to tell us that this is the reason that the market is not fragmented. Either it is possible to build and sell a phone not conforming to those compatibility agreement (that’s what voluntary means) or everyone is somehow forced to be compatible and thus we don’t have platform fragmentation – you can’t have both, Google.

Being able to run apps build for AOSP is also not unique to the Google Android operating system. Newer BlackBerry OS and Sailfish OS versions had a compatibility layer that allowed them to run some AOSP compatible apps. The problem is that many apps are not AOSP compatible, but only compatible to Google Android, making these compatibility layer incompatible to them. If the compatibility tests would only covering AOSP (which they don’t), then these systems might pass them.

And did you notice what this means? Actually Google’s compatibility enforcements which led to most apps requiring Google Android, finally led to more fragmentation compared to when they won’t require everyone to use Google Android instead of AOSP. If app developers can’t rely on Google extensions being present on the device, they will tend to build their apps AOSP compatible. So it’s thanks to Google that we have less competition and more fragmentation. In fact, some app developers provide two versions of their apps these days: one for Google Android and one for AOSP and Google is trying to tell us, that forcing manufacturers to use Google Android instead AOSP is helping against fragmentation.

About preloaded apps

European Commission’s third argument was about Google forcing manufacturers to preload apps. Again Google starts with the point that no manufacturer is forced to install any apps, they could use AOSP. Again they forget to point out that this means most apps will refuse to run on these devices. But if you want to use Google Android, you have to use all of it, including numerous apps. But Google argues this is fine, because 1. Microsoft and Apple do so as well, 2. manufacturers are allowed to install competing apps beside Google ones and 3. they pre-install far less apps than

Now they try to prove that Microsoft and Apple do so by showing the list of pre-installed apps on the Microsoft Lumia 550 and the iPhone 7. Well done, Google: you proved that Microsoft and Apple are not forced by a third party to install apps on their phones. Oh wait, they are developing and manufacturing their phones their-selves, so obviously there is no-one that could force them. Yes, Google just proved their-self that they don’t have competitors in their market by not comparing with any.

Google argues that they can only offer all their products together for free and would require licensing fees if they don’t. The interesting question is: which product exactly is not profitable so that it can only be offered with others? And can we have only those that are profitable and skip the other ones? The app that manufacturers are probably most interested in is the Play Store. In 2015, Google made about 7 billion USD in sales through Google Play (apps, digital content, branded devices). That’s about 10% of their total revenue. No way, that they need to bundle this service with search to pay for it. And the other way round: Search, with its included ads, is probably the most profitable section of Google. But in their answer, Google states that they can only offer Google Search and Google Play bundled (explicit example).

License fees and market price

And, speaking about license fees: Google argues that them not requiring license fees is the main reason for lower phone end-prices. It’s not. The reasons for cheaper retail prices are competition, bad working conditions for workers in africa (for copper material) and china (manufacturing) and research. The Fairphone 2, a modern yet not premium smartphone, has a consumer price of about 525€ including Taxes, of which the hardware alone makes 340€. An additional few euros on this for a software is not very relevant for the price, and in fact, Fairphone is doing exactly that: by developing and providing an AOSP based alternative system to the default Google Android based one.

Also note that even phones paying for the operating system can be very cheap. The Acer Liquid M330 is at prices about 100€ and it ships with Windows 10 Mobile, which requires paying license fees to Microsoft.

Final statements

Google closes their statement with the accusation, that the European Commission is sending the signal that they favor closed over open platforms. But it’s exactly the opposite: Google Android is not open and the European Commission wants to make sure that it looses relevance in favor of AOSP, the open platform Google tries to close down more with every release.

Fair enough, Google is fearing this and I understand that loosing control over the Android operating system is not their intention and maybe makes it less profitable for them (but surely still profitable), but that does not mean that they should get away with everything. Especially a marketing campaign based on “post-truth” supported by some animations.

Summarizing in Google’s metaphors: Android is not a ‘one way street’; it’s a multi-lane highway used for an illegal race of over 1,300 brands: You are free to take the exit or even turn around if you like, but you have no chance to win if you do so – and for the latter even a high chance to die. But bless Google, you can still choose the lane. That’s “choice at every turn” – well, better don’t turn.

I can only ask the Commission to hold the line. You’re on the right track and I know several people in the industry putting their hope on you, beside many users that do not want to put their whole life into Google’s hands. Don’t disappoint them.