I find it hard to reconcile the term free market with the monopoly status granted in a patent, but this is the system we have and MS would be wrong to not respond in this way. The goal here is to make Android uneconomic for handset makers, not to generate revenue.

Google can dump their OS on the market because their business model is different than Microsoft's. They make 98% of their revenue on advertising, so it is in their interest to commoditize the OS level and increase the adoption of internet-connected devices. MS makes virtually all their profits on the licensing of software, they need to protect that business and their core platforms.