Europe nearing Google antitrust charges | Hacker News Reader

Europe nearing Google antitrust charges

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37 pointsJerry253 comments

I don't understand why Google gets attacked when at least you can install competing services and you can't on iOS. Why does iOS get a pass? If Google built the hardware itself it could lock it down all it wants? That's the reason? You can get Firefox on Android and not on iOS. You can replace almost anything, and on iOS you can't. You can disable many of the default apps on Android, I don't know if you can on iOS.

You can't install competing services on iOS? https://itunes.apple.com/us/app/google-maps/id585027354?mt=8

You can't get FireFox on iOS? https://itunes.apple.com/us/app/firefox-web-browser/id989804...

That's not Firefox proper, that's a webview. Nobody can build an alternative browser for iOS. As for an example of competing services that can't be installed on iOS, look to f.lux.

No, you can't get Firefox on iOS. You can sync bookmarks with Firefox and get a Firefox-style border around Webkit though. :(

The problem, I believe, is the market share. If your OS is only on 3 or even 4 out of 10 phones, then you're not in a dominant position, and whatever you do, you're not abusing your market power, which is what antitrust is all about.

So Apple and their OSs will always be safe from this kind of thing because they're simply not the biggest player when it comes to market share.

So why is it that when people want to paint Apple in a positive light they dismiss market share and point to profits? If Apple pulling in 90% of the profits in the industry is what counts when evaluating the relative strengths of both platforms then why doesn't it matter when considering abuses of market position?

I think it's pretty clear that despite selling a minority of devices Apple has at least as much power to drive the overall direction of the market as Google.

You bring up the exact point that I was just thinking about, namely why market share is used as a criteria for defining whether certain behaviors fall into the anticompetitive realm but profit share isn’t.

Apple taking 90% of overall worldwide smartphone profits may not be good for competition or the consumer, yet that isn’t regulated, not that I am suggesting that it should be. Apple obviously has enormous power due to its profitability that gives it a competitive advantage.

I guess the thing I’m having a hard time wrapping my head around is exactly when normal competitive practices become anticompetitive, requiring legal intervention from regulators, and why these seem to center solely around market share and not other things like profits.

> Apple obviously has enormous power due to its profitability that gives it a competitive advantage.

The law doesn't care about competitive advantage. It cares about making sure that your competitive dominance doesn't translate into dominating other markets.

For instance, Microsoft dominating personal OS market and making sure that their product stays on top is OK. Microsoft using their domination of that market to drive competition out of other markets is not.

That makes a lot of sense but just to play devil's advocate are we considering the OS/App market separate from the hardware market? If so, and considering Apple makes a not insignificant amount from the App Store and doesn't allow competing stores on iPhone hardware, wouldn't that be an example of trying to dominate another market?

Again, I don't want to come off as needlessly argumentative, I'm just trying to get a better understanding of this topic.

In my opinion, it's less problematic to run a closed environment, than to run an "open" environment, only to swindle the people that you just invited in your backyard.

The whole idea is that if you're going to let people build on your platform but compete with them and leverage your platform in order to do so, you effectively lured people into thinking that it was possible to build on your platform when in fact it was not, and that you benefit from this misunderstanding. And that's dishonest. If you open a "public market", then you should be accountable for keeping it fair and unbiased.

Keep in mind that the last part about how it "should" be is an opinion and not fact on the law.

Thanks for the thoughtful response. You make an especially good point about being accountable when running a "public market" that I hadn't really considered.

Profits are important for the market you are in. Market share can be important for dominating markets you are currently not in. That is the base of all antitrust probes: A dominant market share is not illegal. Using that dominant market share to boost your position in other markets is illegal.

So, the central question is: Does Google use the dominant market share of Android and its position to further their position in other markets, e.g. the browser market (Chrome), the mail application market (GMail App), news market (Google News) and so on. If yes, there is a problem with european antitrust law.

Apple is clearly levering the market power and integration of iOS and their other services to drive their agenda in TV, music, mobile payments, cloud storage, music and video production software, etc etc. I don't see much difference here.

Dominant market power and leveraging it are needed. Apple may leverage their market power, but they aren't dominant. Let me ask directly: Do you not understand it (so, do further explanations help) or do you not want to understand it because it goes against your positions? Both are ok, just asking for clarification to make sure I don't waste your and my time.

They are utterly dominant in the one metric Apple boosters usually claim is the one that counts. So why is that metric suddenly irrelevant now? I realize that as the law is written this may not matter but if we're discussing whether the government should intervene here it's perfectly relevant.

I'm an iOS developer by the way so I'm not anti Apple. I just think there is already healthy competition in mobile and government intervention is going to hurt consumers in this case. Apple can regain market share any time it chooses to by lowering its unprecedented profit margins.

I don't understand that law as well. So, you start being good, keep 'mostly' doing good and grow, and at one point, what has been good suddenly becomes bad just because you have grown more than anybody else?

Because antitrust is about leverage. Using your position in one market to get an advantage in another. Apple is the only provider of hardware running iOS, so leverage do not play a part there.

Not so long ago, physical phones and software markets were separate. Apple did a fine job muscling in its app store by leveraging the early dominance of its phone hardware.

The app store story is longer and thornier than that.

It starts back with the iPod, a device that was at first wedded to Mac by software and hardware (first model used FireWire, not USB).

Only with the release of a USB model, and subsequently iTunes on Windows do it pick up steam.

Then came the music store, and Apple got in hot water on multiple front over that one.

The first iPhone was bootstrapped on top of that, and the App Store only came about after jailbreakers started building a third party ecosystem of apps.

And more recently Apple got into trouble over ebook price fixing, iirc.

A few of the responses to your comments have covered a lot, but they miss the primary issue: Apple only controls itself. Through the Android MADA, a confidential contract Google forces OEMs to sign in exchange for the Play Store, Google basically de facto controls the majority of the mobile industry. Google has full veto power over all of their Android-based device and software releases.

Google has a ridiculous amount of power, and if they say jump, everyone in the industry has to ask how high. They've left a bunch of "but technically" loopholes to excuse themselves, but given that it's impossible to sell a SUCCESSFUL Android smartphone without signing their contract, those loopholes don't stand up in court.

The existence of Android, a platform for Google to push their apps and services, has been clear from the start, along with the terms by which a phone maker is able to distribute Google Play.

> Google has a ridiculous amount of power, and if they say jump, everyone in the industry has to ask how high

That's not an anti-trust violation. I hope they come up with something much better than that.

It is quite simple really, Apple has in no way the market share that a Google has. The impact of their anti-competitive decisions are vairy low.

The problem is also not having big marketshare but having it AND doing things that may be anti-competitive. European companies have also brought before court for the same reasons.

Btw Apple had also been brought to court for not applying European laws especially regarding warranty's which they lost.

You're trying to make some sense of this, but no, there is no sense and it isn't simple either.

For one because Google's Android does not qualify as a monopoly and the mere existence of Apple's iOS which has 20% of the European market is testament to that. But also because having a monopoly isn't illegal and I'm quite curious what anti-trust charges they are going to bring, because as the parent says, Android has been the most flexible mainstream mobile OS, more than iOS or Windows Phone. Android is the only one on top of which Firefox was possible, the only one admitting third-party installation sources and app stores and the only one that can have a CyanogenMod. Android is actually the only one that can be forked and Amazon has successfully forked Android.

And the reason for why it doesn't make sense is because Google charges no licence money for Android and they've been quite forthcoming about the reason why Android exists, right from the start, its existence being all about Google having a mobile platform to distribute their apps and services. Phone makers don't even have to agree to this, though no Google agreement means no Google Play, terms that again, have been there from the start. And in fact Apple and Microsoft have both used their existing position in desktop operating systems, an easily provable oligarchy, to push their mobile OSs and lock users in.

> European companies have also brought before court for the same reasons

Oh, come on, you know that ain't true. They are targeting Google specifically because they don't want to share their Search & News revenue with a dying mass-media industry. And I'm saying this as an European.

If cornering 80% of the market is so terrible, the EU should make it illegal to sell the Nth Android phone that pushes past 79%, and/or make it illegal for the customer to buy such a phone.

The absurdity of such a proposed law should make it obvious that Google is doing nothing wrong by selling popular devices with a certain operating system.

Consider other historical antitrust battles. It's often not about dominance in one niche, but leveraging that dominance into other areas and limiting innovation there.

By your assertion, you would be happy to have had IE tightly integrated into Windows since the early 00s and make it extremely difficult for typical users to install another browser. Competing browsers would also be at a technical disadvantage to IE since they don't control the underlying OS. After all, Windows is popular, why shouldn't they...

You make a very good point and I certainly don't think that IE being tightly coupled to the underlying OS would be good for browser competition. At the same time couldn't I argue that a company such as Apple having so much power over their suppliers due to their market position, and profitability, is also not good for overall competition?

It's certainly going to be difficult if not impossible for a new entrant in the smartphone world to out compete an incumbent like Apple when negotiating contracts with Foxconn.

As I said in my other comment in this thread, I'm having a hard time understanding why certain behaviors get labeled anticompetitive while other behaviors, that ultimately may be just as detrimental to competition, don't.

I admittedly don't have a very deep understanding of these issues and I am perfectly willing to admit I might be completely wrong but I would love to hear your and other readers' thoughts.

> For one because Google's Android does not qualify as a monopoly

They have over 70% of marketshare in the top 5 european countries. They may be technically not a monopoly, with those percentages their actions have a bigger impact and can certainly disturb a market.

> And the reason for why it doesn't make sense is because Google charges no licence money for Android

If I'm remember correctly that was also the argument some used regarding the Internet explorer case or Windows Media player. It was given away free.

Again it isn't about having a big market share, the price of the fact that an OS is flexible. It's about using your position to potentially disrupt a market.

Then again is also not because the EU is making a case that Google will be automatically found guilty or it won't be possible to defend themself.

> Oh, come on, you know that ain't true. They are targeting Google specifically because they don't want to share their Search & News revenue with a dying mass-media industry. And I'm saying this as an European.

European cartels, anti competitive behaviour etc have received the same scrutiny in the past. I think the highest fine is still the 990 million euro's Kone, Otis, Schindler and ThyssenKrupp received and they are European.

The reason why I'm stating this because I'm sick of tired hearing in these kind of discussions that Google only gets targeted because they are American while that is certainly not the case.

> abusing a dominant position in mobile operating systems to pre-install its own applications and services in smartphones

So Google made Android specifically for distributing their apps and services and everybody knew this and agreed with it. It wasn't even in fine print, it was written all over it. Everybody knew what they were getting into. I don't understand how can they abuse their "position in mobile operating systems" to pre-install their apps when that has been the only reason Android exists.

Is that the sound of incompetence or that of malevolence? Are they aiming for extortion? Is that it?

Arguing that you broke the law in a very deliberate and public way doesn't sound like a very good defense. Neither does accusing the state attorneys of being malevolent, incompetents or crooks.

Building a product whose price tag, contract and purpose has been clear from day one and that had organic growth can't be against the law. The first Android phone in the world, with version 1.0, the HTC Dream released in 2008, was delivered with Google's apps, including Search, Gmail, Maps, YouTube, Talk, Contacts, Calendar and Android Market (now Google Play). And from a timid version 1 to reach a dominant market position, that's not breaking the law either. Unless we live in some twisted parallel universe.

And yes, I am accusing the state attorneys of being either malevolent, incompetent or crooks, especially since they are doing it on (my) taxpayer's money.

I suspect one part of the rationale behind this is that as Android has gained dominance Google has moved some core API functions out of the generic AOSP source-code (which everyone can use) and into the Google Play services which require the device manufacturer to sign a contract for, which apparently also includes terms that have - at least in the past as I understand it - required pre-installation (possibly in prominent positions) of Google applications.

On that basis there is a strong correlation with the anti-trust convictions of Microsoft over bundling Internet Explorer into the Windows OS which effectively destroyed the paid-application model for web browsers (Netscape - which had 90% market share - could no longer succeed whilst charging ~US$20 (UK£15) and (AOL/Netscape) transferred the code to the Mozilla Foundation).

apologies for glossing over fine-detail but I ran out of my daily parenthesis allowance.

I know that contractual conditions for Google Play aren't so easy on phone makers, but then again phone makers are free to build their own marketplace and ecosystem. I know at least Samsung tried it, their Galaxy phones shipping with a parallel marketplace, in addition with Google Play. Didn't work out.

I don't know specifics of things moved out of AOSP. If that's true, then there's some logic to it. But I did use CianogenMod without Google Play on it. It's still usable. Though certain things like Android's push notification system cannot happen without Google's infrastructure and that can't simply be free, even if the integration would be in AOSP. There might be truth to this, not saying otherwise.

On Microsoft, I blame them for many things, like for killing BeOS or for fueling SCO's lawsuit against Linux or now for racketeering in the mobile industry, but bringing anti-trust charges because of Internet Explorer and splitting them up (as was the plan) would have been a terrible and unjust ruling. Netscape killed themselves and sorry to say it, but Internet Explorer was not only free and bundled, but technically superior. And that was fine IMHO, because in its place Mozilla was born and the rest is history. Regardless, compare Microsoft of the nineties to what Apple is doing now with iOS. Makes Microsoft of the nineties look quite open by comparison, doesn't it? And can you imagine a phone or a computer not shipping with a browser included by default?

Speaking of browsers, Android is the only mainstream mobile OS that allows third-party browsers. Firefox is currently only possible for Android.

Regarding Microsoft:

The U.S. remedy of splitting Microsoft up (which was over-turned on appeal) and led to the more limited U.S. Consent decree doesn't negate the findings of fact:

"Judge Thomas Penfield Jackson issued his findings of fact on November 5, 1999, which stated that Microsoft's dominance of the x86-based personal computer operating systems market constituted a monopoly, and that Microsoft had taken actions to crush threats to that monopoly, including Apple, Java, Netscape, Lotus Notes, RealNetworks, Linux, and others." [0]

In Europe the EU consistently found against Microsoft and fined them very large sums (> €1.5B) over the course of more than 10 years due to monopolistic practices and refusing to implement judgements around bundled media-player, web-browser and lack of interoperability for server (APIs). [1]

"Microsoft entered into a consent decree in 1994 that barred Microsoft from conditioning the availability of Windows licenses or varying their prices based on whether OEMs distributed other operating systems.[8] Microsoft General Counsel Brad Smith said that the decree was effective in allowing Dell and HP to offer Linux computers". [2]

This was later nick-named the Windows Tax, but at the time it prevented alternative OSs such as Digital Research DOS (DR-DOS) from gaining much traction as a pre-installed OS (I owned a company back then that did pre-install DR-DOS and it was much better than MS-DOS).

Regarding Google/Android:

"While it might not be an official requirement, being granted a Google apps license will go a whole lot easier if you join the Open Handset Alliance. The OHA is a group of companies committed to Android -- Google's Android -- and members are contractually prohibited from building non-Google approved devices. That's right, joining the OHA requires a company to sign its life away and promise to not build a device that runs a competing Android fork.

Acer was bit by this requirement when it tried to build devices that ran Alibaba's Aliyun OS in China. Aliyun is an Android fork, and when Google got wind of it, Acer was told to shut the project down or lose its access to Google apps. Google even made a public blog post about it:

"While Android remains free for anyone to use as they would like, only Android compatible devices benefit from the full Android ecosystem. By joining the Open Handset Alliance, each member contributes to and builds one Android platform -- not a bunch of incompatible versions." [3]

Also in that article is a good overview (albeit from 2013) of how Google has progressively moved open source functionality into the closed source Google applications.

And from a different source (lauding the move to Play services) there's:

"Google not only has pulled these services and their respective APIs out of the OS, it has made it easy for application developers to use them. The past few days here at Google I/O we've seen just how easy it can be to add these features to an app, because Google is doing all the heavy lifting. Developers only need to reference the particular thing they need from the Google Play Services application in their code, and the magic happens when you run it on your phone." [4]

[0] https://en.wikipedia.org/wiki/United_States_v._Microsoft_Cor...

[1] https://en.wikipedia.org/wiki/Microsoft_litigation#Anti-trus...

[2] https://en.wikipedia.org/wiki/Bundling_of_Microsoft_Windows#...

[3] http://www.wired.co.uk/news/archive/2013-10/21/googles-iron-...

[4] http://www.androidcentral.com/new-google-play-services

Granted, the prohibition from building non-Google approved devices, along with stopping Acer from building Aliyun OS devices looks bad.

To add a little context based on an antitrust course taken in a U.S. law school a few years ago, European antitrust law is quite different from American antitrust law so American ideas about market share and consumer choice may not be applicable.

In the U.S. the primary focus of antitrust enforcement is on the consumer, so if the consumer is getting a solid product for "free" and has lots of other options, there is no chance of an antitrust action happening.

From what I remember, European antitrust enforcement also takes the well-being of competitors into account, so if one company has a large market share and enough pricing power to make it difficult for competitors to survive, the authorities may bring legal action, based on the theory that it's better for society to have more different businesses offering choice and employing people.

I don't think this is actually all that different. Both jurisdictions recognize that competition is preferable. Minor differences in why they focus on that, is probably not all that relevant. Making it impossible for competitors to function in the US is problematic as well, because it leads to a lack of consumer choice. (Just because Google is free, doesn't mean all of us want it.)

Furthermore, the EU has demonstrated overall a stronger focus, I think, on the individual over corporate interests. Seen also in their handling of privacy, where they're willing to place large burdens on corporations in order to adequately protect their citizens' fundamental rights.

Wait so the EU can have a $7B windfall from a guilty verdict yet they will remain impartial? Nice!

The judges shouldn't be seeing a penny more or less no matter the verdict. If they're bribed that is another matter.

But don't the judges work for the EU?

Yes, and their job is to interpret the law impartially. It isn't a perfect system. How would you suggest we improve upon it?

We could create a political body that is outside any of the countries. Everyone that agrees to be part of it will have to respect its decisions.

Once this is setup the world will be united. We can then call it the United Countries or something like that. It's going to be great!

And?

"EU" is a broad term. The legislature is a different branch to the executive ie the European Commission. Most here in the UK get it wrong too.

Judges may think of their families, communities, and countries; in something of this scale it would be hard to be impartial.

How much of an effect would $6B really have on the EU? According to Wikipedia[0], their GDP is around $16,800 billion. If I were the judge I wouldn't see any reason to believe my community would derive any measurably benefit from that income.

If a politician came to them and said, "we're going to use that $6B to fund this particular program," well sure, but that would seem to be a subset of bribery.

[0] https://en.wikipedia.org/wiki/Economy_of_the_European_Union

Judges may think of their families, communities, and countries; in something of this scale it would be hard to be impartial.

Compared to the combined national budgets of the EU member states the fine amount would be a rounding error.

If you seriously believe in such endemic corruption, you could equally fantasise that Google has enough money to buy a not-guilty verdict, yet the EU will remain impartial?

In fact, in the US, Google HAS bought a non-guilty verdict. The US counterpart of Ms. Vestager is the commissioner of the FTC. For two years, that person was a paid Google spokesperson, and the case against Google that had been building here in the US was found by their staff to have merit, yet quietly buried. As soon as their paid shill stepped down last year, the investigation was reopened.

(Sources can be provided. If you doubt any claim here, please ask!)

This is interesting information and worth bringing up. However, there are some important legal differences between a decision not to prosecute and a verdict in court.

For example, if Google had actually received a "not guilty" verdict on this issue, it wouldn't have been possible to reopen the investigation at all.

Yes, that's true.

I would be very interested in reading any sources on this you may choose to provide, if you please.

So, it starts with a slightly different form of sleezy behavior: Google paid a university to write "academic studies" that Google would then claim demonstrated that Google wasn't anticompetitive.

http://www.businessinsider.com/google-and-george-mason-unive...

One of the professors, who was the author of many of those "studies" is Joshua Wright, who thereafter took the FTC Commissioner position in 2013. Note that the Google checks to GMU started the same month as the FTC probe began.

http://www.salon.com/2015/11/24/googles_insidious_shadow_lob...

The FTC investigation around this time had found significant cause to go after Google:

http://www.wsj.com/articles/inside-the-u-s-antitrust-probe-o...

Despite this, the FTC decided to close the investigation without any significant change on January 3rd, 2013:

https://www.ftc.gov/news-events/press-releases/2013/01/googl...

And the Google-paid advocate above, Joshua Wright, was signed in as FTC Commissioner just ten days later:

https://www.ftc.gov/about-ftc/biographies/joshua-d-wright

Note that the close relationship between Google and this White House have been well documented. Googlers are some of Obama's top contributors in the previous Presidential election, numerous Googlers have taken high-ranking positions at the White House, and Google executives or representatives visit weekly. So I have a hard time buying that any of this is coincidence.

And the rumor is, that within like a month of Joshua Wright resigning, the FTC started investigating Google antitrust again.

Are you suggesting that all the rulings from the EU Commission are ilegal and motivated by the fines they impose?

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