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2/14/2014
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Google's Android Contract: Not Very Open

Google's rules for Android partners are unlawful, says Harvard professor.

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Google's claims about the openness of Android have been called into question by Harvard Business School associate professor Benjamin Edelman, who asserts that the company's Mobile Application Distribution Agreement suppresses competition and harms consumers.

In 2010, Andy Rubin, then head of Android, tweeted his definition of open: the commands necessary to fetch the Android source code from its online repository and compile it. While that may qualify as open in the context of open-source software, it only refers to a portion of Android, and it fails to describe contractual terms that Google imposes on companies seeking to distribute Google's popular mobile applications on Android hardware.

"In order to obtain key mobile apps, including Google's own Search, Maps, and YouTube, manufacturers must agree to install all the apps Google specifies, with the prominence Google requires, including setting these apps as default where Google instructs," Edelman explained in an online post.

Such requirements run contrary to statements about the openness of Android that have been made by Google leaders like executive chairman Eric Schmidt and senior VP Jonathan Rosenberg, insisted Edelman.

[Can Android help Nokia regain its mojo? Learn Why Nokia Plans An Android Phone.]

Edelman, who acknowledges having served as a consultant for Google competitors like Microsoft, usually with regard to online advertising fraud, said in an email that while it's common to use contracts to constrain partners, he believes Google's behavior is unlawful and should be reviewed by regulators.

Edelman said that Google holds a dominant position in the smartphone market and that the restrictions it imposes on Android hardware makers have no plausible procompetitive purpose. And he said that Google's reliance on nondisclosure agreements to keep contract terms out of the public eye and its "arguably misleading statements to the public" represent an effort to suppress a competitive response.

"What proper business objective, other than blocking competition, is advanced by disallowing a phone manufacturer from installing just (say) YouTube, but not Google Maps, if the manufacturer so chooses?" Edelman said in an email. "Or from installing Google Play and Google Maps, but DuckDuckGo for search? Some users might prefer this, and some manufacturers might want to tailor their offerings accordingly. Google prevents it. I don't think we'd see many actions of comparable brazenness from many tech companies."

HTC One, like all Android devices, ships with Google Search, Maps, and YouTube.
HTC One, like all Android devices, ships with Google Search, Maps, and YouTube.

Google did not respond to a request for comment.

Edelman's argument relies on a specific definition of the relevant market, which he defines as "the market for operating systems to install onto smartphones." The two primary operating systems in this market are Android and Windows Phone, both of which are available to third-party phone makers. But Apple's iOS is not part of this market, because it's not available to other companies. If it were, the dominance of Android would be less pronounced (80% compared to 97%, per IDC figures, if 2013's fourth quarter shipment volumes of Android and Windows Phone together define the whole market), though still substantial.

While Edelman suggested few tech companies have engaged in comparably brazen anticompetitive behavior, both Apple and Microsoft have participated in something of the sort. In Microsoft's case, it was the company's attempt to eliminate the competing Netscape browser and its API restrictions, documented in the 1998 US antitrust case and similar European Union proceedings. Microsoft, as a consequence of its EU settlement, until later this year must display a browser choice screen in Windows to promote competition.

Apple last year was found guilty of e-book price fixing and remains under the supervision of a court-appointed monitor. In 2010, Apple, along with Google, Intel, Adobe, Intuit, and Pixar, settled a Department of Justice lawsuit that claimed the companies made secret no-poaching agreements that "diminished competition to the detriment of affected employees who were likely deprived of competitively important information and access to better job opportunities."

And Apple has taken other actions which, while not subject to legal challenge and offering plausible consumer benefits, nonetheless constrain competition. The company's iOS developer terms of service agreement ruled out the possibility of Adobe Flash and Oracle/Sun Java on iOS devices. In 2010, Apple refused to approve the Google Voice app because "it appears to alter the iPhone's distinctive user experience." (Facing FCC scrutiny, Apple negotiated with Google and subsequently approved the app.) And Apple limits access to its JIT-enabled JavaScript engine to its own mobile Safari browser, presumably for security reasons, though it gains a browsing speed advantage as a result.

Tech companies say they welcome competition, but they do everything they can to shield themselves from it.

Google, meanwhile, just agreed to settle one of three European Commission (EC) inquiries into possible anticompetitive behavior. The company has committed to making changes to its search business even as the EC continues to look into its Android business and the way its Motorola Mobility unit, which is being sold to Lenovo, sought injunctions based on industry-standard patents.

If EU regulators come to share Edelman's view that Google's linkage of its services harms customers and competitors, Google may not settle the EC's Android inquiry as easily as it dealt with challenges to its search business operations.

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Thomas Claburn has been writing about business and technology since 1996, for publications such as New Architect, PC Computing, InformationWeek, Salon, Wired, and Ziff Davis Smart Business. Before that, he worked in film and television, having earned a not particularly useful ... View Full Bio

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jries921
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jries921,
User Rank: Ninja
2/14/2014 | 4:31:22 PM
I see I'm not the only one who suspects illegality
But as neither I nor Prof. Edelman are lawyers, I trust that the latter consulted with a law professor prior to making his statement.  I understand that Harvard has some very good ones.

 
DDURBIN1
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DDURBIN1,
User Rank: Ninja
2/14/2014 | 3:29:48 PM
Re: Semantics

And where was the Harvard review on the Anti-trust issues with Apple and Microsoft?  Google's play on the word "open" is truly a marketing tactic not based in open code reality and it's no secret.  You are exactly right, Google's play is the same as Apple and M$ so why the anti-trust concerns?

Thomas Claburn
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Thomas Claburn,
User Rank: Author
2/14/2014 | 3:25:52 PM
Re: Adroid adopters should insist on more openness
Google likes to point out that Edelman has consulted for Microsoft but I don't think that invalidates or addresses his points. While Google may be guilty of using "open" a bit too freely, I'm not convinced its tying is more anticompetitive than what every other platform company does.

Should Android and Windows Phone even be thought of as the same market, given that Microsoft is in the business of selling its operating system and Android is free? Android pretty much killed the market for non-free operating systems. 
DDURBIN1
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DDURBIN1,
User Rank: Ninja
2/14/2014 | 3:22:22 PM
Re: Android is a lease not a purchase
I find it interesting now that Google's Andriod is a dominent mobile platform it's taking this type of heat when Microsoft has pretty much conducted itself in the same manner for decades.  Dare a manufacturer place a licensed OEM version of Windows on a device with "vendor" changes upon it.  How about omitting I.E. or Bing search for example.  Not installing any Microsoft components is not allowed with no anti-trust there except maybe being forced to provide options at time of install which Google also allowes.
Charlie Babcock
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Charlie Babcock,
User Rank: Author
2/14/2014 | 2:48:05 PM
Adroid adopters should insist on more openness
Agree, Tom, once you pass 50% market share, you become more susceptible to charges of monopoly and restraint of trade. Google dictates the adoption of Google Maps, the reverse side of the coin of Apple restricting its adoption in favor of Apple Maps. Which company is more restrictive? To me, they're doing the same thing, with Apple acknowledging it's a closed system. Still, there's resentment in Edelman's assessment of Google using the term open. Microsoft knows better than most how damaging "open" is when used in contrast to your company's practices. Android adopters, not Microsoft consultants, should be protesting. 
jagibbons
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jagibbons,
User Rank: Ninja
2/14/2014 | 2:08:36 PM
Re: Semantics
The problem is that Google claims to be open, but isn't. I don't hear many complaints about Apple's very closed ecosystem anymore, but they're very clear that it is closed with few prospects for changing. Google says they're open, but they're really no different than all the other players in that space.

Shame on Google for misrepresenting itself, and shame on the rest of us for believing any tech giant would really be all that different from how everyone else in the market plays.
danielcawrey
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danielcawrey,
User Rank: Ninja
2/14/2014 | 2:01:40 PM
Re: Semantics
This idea that Google's platform is open is pretty much a farce. Let's face it: Google wants to court developers to its ecosystem. In order to do that, it promoted the ethos of openness. But in order for it to succeed in its business objectives, it has to have control over its operating systems like Android. 

It's the Microsoft and Apple playbook. Google is in the same game. 
Thomas Claburn
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Thomas Claburn,
User Rank: Author
2/14/2014 | 1:57:03 PM
Re: Android is a lease not a purchase
> An all or nothing approach on Google Apps seems legal

Except in antitrust law, things change when a company dominates a market. What might be fine for a company with a small market share to do may not be for a market leader like Google. That's why the definition of the relevant market matters.
DDURBIN1
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DDURBIN1,
User Rank: Ninja
2/14/2014 | 12:55:32 PM
Android is a lease not a purchase
Google's agreement with partners is like a landlord's agreement with tenants.  If no pets are allowed then no pets can be in the apartment.  If not liked then you don't have to take it.  In addition, Google gives Android to partners for free unlike Microsoft.  An all or nothing approach on Google Apps seems legal for the right to free usage.  Samsung is working on their own OS so we'll see how well that goes but if HP couldn't make WebOS work I'm not so sure Samsung can go it alone either.
jagibbons
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jagibbons,
User Rank: Ninja
2/14/2014 | 12:36:28 PM
Semantics
That's an interesting opinion from someone who's consulted for Google's chief rivals in the overall technology market. Perhaps the usage of the term "open" is really the issue here. Whatever apps come preinstalled on any device (which includes all kinds of junk that carriers and the hardware makers add without regard to customer preference), competing apps can be installed and defaults can be set to bypass the native Google app for just about any function. All of the big tech guys across all of the markets do similar things. Does that make it right? No, but maybe we ought not single out one over the other.

My decidedly non-legal expert opinion...
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