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EU Antitrust Endgame is Google-Android Platform Neutrality

Most have missed entirely the broader significance of the EC-DGComp’s laser-focused Google Statement of Objections (that charge Google is dominant in search and is abusing that dominance in Google Shopping by self-dealing via preferencing Google content over competitors’ content) in the broader context of the EU’s new “platform neutrality” principle to advance a European Single Digital Market.

To date, Google is the only digital company that the EC-DGComp has found to be an abusively dominant “platform” warranting a non-discrimination remedy that Google cannot self-deal. A primary allegation driving the EC’s new antitrust investigation of the Google-Android platform is that Google self-deals by design in requiring Google Search and other Google apps to be offered to users by default on Android.

The significance of what DGComp and the EU do on Google-Android “platform neutrality” could turn out to be the single most important element long term for the European Single Digital Market.

Why?

Android is rapidly becoming Europe’s (and most of the world’s) single dominant digital operating system that increasingly will have the market power to dictate who wins and who loses throughout the markets for digital devices, the Internet of things, the connected home, the connected car, etc.

From a dominance perspective, Google’s search and search advertising is all about disintermediating, self-dealing, and dominating online content in the virtual world of digital bits, whereas the Google-Android platform is all about disintermediating, self-dealing and dominating offline manufacturers of actual objects in the physical world of atoms: devices, equipment, vehicles, sensors, etc.

Simply, Android is on path to be the operating system of the global g-conomy.

The profound difference between the previous Microsoft operating system antitrust case and the current Google-Android operating system antitrust case is that vigilant antitrust action in the 1990’s prevented Microsoft from extending its dominance beyond the PC/Office software sector, whereas lax antitrust enforcement facilitated the rapid proliferation of Google’s dominance beyond the borders of the Internet sector into most every sector of the economy that the Internet impacts.  

Google-Android’s leveraged market power has rapidly metastasized into most other sectors in the economy in one way or another, empowering Google to disintermediate, self-deal and dominate markets that have become increasingly dependent on, and subordinated to, the Android operating system’s default apps like: Maps, Chrome, YouTube, Gmail, Translate, etc.    

Consider the flood of evidence of Android"s proliferating dominance impacting Europe’s single digital market.

Just a month before the EC charged Google with abuse of its search dominance, consider how Google Head of Product, Sundar Pichai, boasted to the Mobile World Congress in Barcelona per Verge reporting: “Search is core to everything we do. With mobile, we not only have search, but we push things to you before you ask. We have huge usage on mobile.”… “Gmail, Chrome, Maps, Android all have over a billion users…” "We serve over one billion translations a day…"

Google recently announced that it would preference its search rankings to websites that optimize for mobile/(Android) – a chilling reminder and display of Google’s market power to force every commercially significant online business to spend their money to make it easier and faster for Android to load, track, and monetize others’ content under the claimed altruism that it was all for the consumer.  

Google recently announced that over half of Google searches now come from mobile devices in the U.S. and nine other countries, and that Android devices now generate over half of global mobile web browsing traffic -- per Statcounter.

In January Statista said:  in 2014, more than one billion Android devices were shipped worldwide, likely bringing Android's installed base to more than two billion devices.” They estimate in 2015 that Android will comprise 59% of all global connected device shipments with operating systems, four times more than Windows, and ~six times more that Apple’s IOS.

A variety of other sources tell us that Android has: ~85% share of global smart phone shipments; 62% share of shipped tablets; and  >50% share of advertising traffic.

Another helpful source of many relevant statistics of Google-Android’s proliferating dominance throughout the g-conomy is Opera Mediaworks, “State of Mobile Advertising Q1 – 2015.”  

Also consider the reality that Android’s dominance is probably vastly understated in these stats above as it relates to the impact of Android’s proliferating dominance on the EU’s Single Digital Market.

Many do not appreciate that Android is not Google’s only dominant operating system, Chrome is the dominant browser of the combined desktop, tablet, console market per Statcounter with ~50% share in April of 2015, which is two and a half times more than either Internet Explorer or Firefox browsers, and five times more than Apple’s Safari browser.

There has been substantial discussion that Android and Chrome’s Linux-based operating systems will merge into one “sooner than later.” Steven J. Vaugh-Nichols of ZDNet has a good summary of the state of play as of late 2014.

  • The WSJ reported that "Hiroshi Lockheimer, Google’s vice president of engineering for its Android mobile-operating system, is now also overseeing the engineering team behind Google’s Chrome operating system." The paper believes that is a sign that Sundar Pichai, Google’s senior vice president in charge of Android, Chrome and Apps since 2013, plans on merging the two operating systems sooner rather than later. If you've been following Google's operating systems closely, you might already have come to this conclusion. After all, both Android and Chrome OS are Linux operating systems. Some Android applications are now running on Chrome OSand soon all of Android apps will be running on Chrome OS. Indeed, if you want to do some work you can already run almost any Android program on your Chromebook.”

In sum, long term expect the main event and challenge of Europe’s Single Digital Market to be how effectively it handles “platform neutrality” for Google Android/Chrome, which is poised to become the pervasive and dominant operating system platform of Europe’s Single Digital Market on which most all of the rest of Europe’s single digital market will function -- and succeed or fail.

If Google continues to be able to serially self-deal like it does now in Search and Search Shopping, the practical concept of a competitive European Single Digital Market will be stillborn.  

Consider this irony, despite antitrust authorities experience with Microsoft, where it leveraged its operating system dominance into PC software, and then was ultimately stopped when attempting to leverage its dominance into the Internet browser market with Explorer.

Many have totally missed the threat of Google operating system dominance because Google started from the purportedly benign offering of free search/Android/Chrome and has relatively quietly and stealthily positioned itself for g-conomy-wide dominance of the Internet operating system market which affords exceptional leverage over g-conomy players who are increasingly dependent on Google not acting anti-competitively to succeed.

It’s time for Europe to connect the dots and act, because the U.S. FTC won't given its apparent short Google political leash   

 

Q&A One Pager Debunking Net Neutrality Myths