Google’s got to be nervous about being on the hook for $5 billion
The European Union has handed down a record-breaking $5 billion dollar fine against Google for monopolistic behavior. What did Google do to deserve this? No, it wasn’t because Google is the primary search engine for many people. However, the EU’s reasoning is related to how Google became the dominant search engine around the world. The EU went after monopolistic practices with Android, namely forcing manufacturers to install Chrome and Google Search on all handsets. It’s similar to their reasoning behind forcing Microsoft to offer browser choices when setting up a new Windows PC. Unlike the Microsoft case, the EU offered Google no solutions, only what they couldn’t do, leaving Google free to come up with their own methods to fix their monopolistic business plan.
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Why Was Google Fined?
Photo credit: Android Authority
Let’s say I want to start up an Android phone manufacturing company. Danielle’s Awesome Tech company, or DAT, will release the DAT Phone in a few years. I’m designing it, so I know everyone will want DAT Phone. It’ll have the fastest processors, plenty of RAM, a large screen and a small body, quad cameras on the back and dual cameras in the front, no notch, an in-screen fingerprint reader, plenty of battery life, and instead of Chrome, it’ll come with Firefox, my favorite browser.
And because of that last detail, I won’t have access to Google Play services, so no gmail, no Google Play app store, or movies, music, or anything else. In fact, I’m going to have to make my own version of many apps now. I’ll also have to make my own App Store, and tell developers to use it. I’ll have zero support from Google. All because I decided I wanted Firefox instead of Chrome.
Let’s say I wanted to make a deal with Microsoft. So, I make a supremely high-end phone, but, because Microsoft pays me to install their launcher, Bing, and Cortana on it, I’m able to sell the phone at a dramatically reduced price to consumers. This creates more competition in the high-end market, forcing competitors to innovate. This would be great for consumers, right? This, too, would get my phone banned from Google Play.
What if I want to make some large customizations to the way Android runs? I can make it faster, with a simplified interface that offers more information to the launcher so I can make a highly intelligent and modular UI that learns about how you use it and changes the interface to best match your needs. For forking Android, that is, creating a new version of Android, I’d be banned from the Google Play store.
This is why Google was fined. They’re controlling what Android manufacturers do, and, in doing so, forcing competition like Firefox, Opera, and Microsoft off the platform.
Google Play is Vital to Android
Google Play Services is an operating system level integration that’s responsible for allowing Google Play to work on a phone. It’s why you can upgrade to a premium version of an app from within the app. It’s why you can download updates in the background. However, due to Google’s monopolistic practices, it’s also why your phone always comes with Google’s Chrome and Google search widgets.
Phones running Android can run any Android apps. You can side-load apps, the practice of downloading and installing apps yourself that you might find anywhere. However, this practice is more dangerous than installing apps from the Google Play Store. While Google Play isn’t perfectly secure, Google has been doing a better job of keeping outright malware off the platform than they did in the past. Without Google Play, users of a phone would be subject to insecure apps.
Android manufacturers can’t sell a device that doesn’t have access to the Google Play Store. The apps, music, movies, and TV shows on the Google Play Store are vital to whether or not customers will want to use a device. The reason most Android manufacturers choose Android as the operating system for their phones is because of this app store. It would be next to impossible to sell a smartphone running Android without the Google Play store, even for the largest and most successful companies, like Amazon.
Amazon Fire Flop
I happen to be one of the few people who owns an Amazon Fire Phone. It was my first personal Android device. I bought it for one reason: it was incredibly cheap to buy alongside a new Prime subscription. Despite that incredible deal, Amazon was having trouble practically giving these phones away. The phone wasn’t too bad. The fork of Android that Amazon made was better for tablets (which is why Amazon still sells cheap Fire tablets), and didn’t make much sense on the phone. However, it had a cool quad front facing camera setup, for immersive 3D head tracking. It was neat. It was also a gimmick.
Without the Google Play Store, users were forced to rely on Amazon for their apps. The Amazon App Store is far more limited than the Google Play Store, with most developers not wanting to make versions of their app that do not rely on Google Play Services or common features of Android. Users could sideload Google Play Services onto their devices to gain access to the Play Store, but the service was broken, unsupported, and unstable. It was considered the only way to make your Fire Phone worth anything, and it was a mess.
Amazon’s Fire Phone failed miserably. Amazon never released a sequel, and they stopped working on the phone operating system. It has never been updated past Android 4.4 KitKat, an outdated version of Android that was a year behind when Amazon introduced it. Amazon proved that if you want to make an Android phone, you must play by Google’s rules. This is how Google formed a monopoly.
Google Chrome is Vital to Google
Google Chrome and Google Search come bundled with Google Play Services, and this is the EU’s problem with it. On one hand, it limits the choices of manufacturers to offer anything else. They can’t compete in new ways, they can’t innovate, and customers are locked down to the same experience across multiple manufacturers. Why would Google do this?
Search. Google’s bread and butter is search. They make their money through search, through ads, through getting users where they want to go online, through their portal. That’s why Google Chrome is included with Google Play Services, so you have to use Google Search with your browser by default. It’s why the search bar and other search widgets come bundled with Google Play Services. Google makes a lot of money by forcing manufacturers to install their apps, and, as such, Android is free for manufacturers to use for their phones. But this is textbook monopolistic behavior. Android phone manufacturers have no choice, and neither do consumers.
Google’s Rebuttal
Google claims downloading new apps is easy. It’s not.
The Third Party Problem
Google claims it’s easy to download a third party app to replace their preloaded versions of Chrome and Search. But it’s not. Even in their gif, included above, they fail to show that removing Google Chrome from the home screen does not uninstall it. In fact, you can’t uninstall it. Same with Google Search and Google’s widgets. They also conveniently don’t show that users must then change their default browser preferences.
If the device is inexpensive and low on storage space, they now have two different apps that do the same thing, wasting space. If the user isn’t tech savvy, they’ll likely struggle to replace Google’s apps permanently, and settle back into using Google’s browser. Google knows this, that’s why they’re fighting to keep this behavior.
Google’s Official Statement
Google claims they’ve created more marketplace competition, not less. However, a quick look at the Amazon Fire Phone, a truly unique Android phone, and other non-Google phones that could run Android apps, like Jolla’s Sailfish OS, show that if you don’t play by Google’s rules and try to make something unique, you will fail.
Google also points out that Android is competing with iOS, that not all smartphones run Android. However, outside of the U.S., a vast majority of smartphones are not running on Apple’s platform. 89% of devices are running Android, according to the EU’s own study. That’s a significant majority.
The main point that Google seems to want to make is that Android is good for the smartphone ecosystem, and their monopolistic behavior should be excused. It’s easy to undo, they claim (it’s not), and manufacturers can still partner with third parties to double up and ship phones that duplicate the functionality of Google’s forcefully included apps. Customers wouldn’t like this though, because it would waste space on their devices.
Android users certainly have many options when it comes to choosing their device. Unfortunately, Android manufacturers don’t have many options when making them, and that monopolistic behavior limits the diversity of Google’s platform. Google believes this is necessary, not only for search revenue, but to keep the platform in line.
The Effect Google Play Services Has Had on Android Fragmentation
Some believe Google’s self-serving behavior actually helped the Android platform. They say that, because Google doesn’t allow manufacturers to fork Android, creating wildly different versions of it in order to gain access to the Google Play Store, that they’ve limited fragmentation. And they’re right.
With Android manufacturers making only small customizations on top of Android, Android has become a more cohesive platform. Users still have many customization options, but developers don’t have to worry as much about vast differences between devices. This can make them more confident in development, and reduces the cost of developing apps for Android. Android app development is already more expensive than iOS, and provides less revenue. Every little bit helps.
Does this mean Google’s right to block forks? Likely, yes. However, according to the EU, the real problem is Google forcing device manufacturers to include their apps. Surely for security and usability reasons, Google couldn’t be blamed for blocking forks of Android, dramatic changes to the core of Android, from using Google Play Services. However, they didn’t have to force manufacturers to use their apps.
Wait, What About Apple?
You can’t even change the default apps on your iOS devices. You’re forced to use Safari and others. Sure, you can download other apps, but if you click a link in Messages, it’ll open in Safari. If you download WhatsApp, it’s not going to have your text messages. Apple’s far worse than Google, right?
Unfortunately, Google and Apple have very different businesses. Apple has a vertical integration of software and hardware. They designed their own software for their own hardware. This means they’re not limiting what another manufacturer can do with their devices, because they’re the only ones who can make the software for their devices. It’s similar to how your Xbox One and PS4 can’t run software made for the other platform. Apple’s allowed to do this because it’s their own hardware.
What Could Happen?
Google intends to appeal their fine and the EU’s findings. $5 billion is a large sum of money, even for a company as successful as Google. However, if Google loses that appeal, not only will they owe $5 billion in damages, they’ll also have to change their distribution method for Android. The EU wasn’t specific about what Google would have to do, but it seems they’d have to at least not mandate that search and Google Chrome come preinstalled. Whether or not this means users will be allowed to choose their browser and search engine when they first boot up a new device, a la Microsoft Windows, or if it’ll be left up to the manufacturers hasn’t been decided yet.
Googles says that, if they can’t pair Chrome and Google Search with Google Play Services, forcing the two to be on every Android device that has access to the incredibly necessary Google Play Store, they’ll have to charge for Android. This means that, instead of getting Android for free, Android manufacturers will have to pay to use Android for their devices. Google may also go a different route, paying manufacturers to use Google Chrome and Google Search on their phones by default, but allowing manufacturers to use a different providers’ apps instead.
Android P is the next version of Android, and Google wouldn’t have time to implement these changes before launch later this year. Therefore, we likely wouldn’t see any changes until at least Android Q, and this would only be if their appeal to the EU goes quickly, and they lose again. Without changing their practices or providing new arguments, it’s hard to see how Google could ever win this case, but perhaps they could save a few billion with a more lenient sentence.
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