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Google Android has 90% OS share because Apple iOS isn’t a direct competitor

Surprise! Google-Android is as dominant as Google search in the EU and much more so in the U.S.

Not only does Google face substantial business risk from the EU concluding Google has abused its 90% search dominance by favoring Google Shopping over competitors in Google search results, but Google’s future business in mobile also faces substantial business risk from the EU likely concluding in its investigation of alleged Android abuses of dominance, that Google-Android has >90% mobile operating system (OS) market share because Apple iOS is not an Android competitor for antitrust purposes.

Google-Android faces much more antitrust risk than conventional wisdom appreciates because antitrust law and precedent can define relevant market boundaries very differently than consumer-oriented industry researchers, investment analysts, or the media do for their particular purposes, which can yield a surprisingly dominant market share in this particular antitrust case.

Conventional wisdom incorrectly assumes that obviously popular and widely-adopted Apple devices compete directly with Android devices. They do not under established antitrust precedent.

In fact, Apple competes as a retailer for consumer purchases of their hardware whereas Android competes as a wholesaler for original equipment manufacturers (OEMs) licensing of their software.      

Therefore per established antirust precedent, Google-Android does not have ~70-80% OS share to Apple iOS’ 15-20% share of the relevant antitrust market as consumer researchers, investment analysts, and tech media currently believe, Google-Android actually commands >90% market share of both the EU and U.S. mobile operating system markets – a market share most everyone (but Google and its advocates) concede is dominant and that of a monopoly.

So what is the proof of this surprising conclusion?

Consider first the established antitrust precedent here and second the market definition analysis behind it.

Established Antirust Precedent

Yogi Berra’s famous malapropism: “its déjà vu all over again” is relevant here.

The established antitrust precedents here are the well-known Microsoft antitrust cases in the U.S. (United States v. Microsoft Corp.), and in the EU (Microsoft v. Commission), which concluded that Microsoft abused its dominance of the antitrust relevant market of operating system software licensable to original equipment manufacturers (OEMs), by tying in Microsoft-OEM licensing agreements that licensers of Microsoft’s OS had to load Microsoft’s browser as the default browser.

In the seminal DOJ and EU antitrust cases against Microsoft, Apple’s Mac computers were excluded from the relevant operating system antitrust market because Apple did not license their Mac operating system to OEMs; Apple kept it as an exclusive proprietary software operating system. The only small share OS competitor to Microsoft at that time was Linux.   

For the same compelling economic model reasons discussed below, the DOJ and EU defined the relevant operating system market to exclude Apple’s proprietary OS. Therefore, expect the EU (and the U.S. FTC, if it seriously follows the EU’s Android investigation lead) to define the relevant antitrust market in the Android case to exclude Apple iOS.

If one doubts this highly-likely market definition, consider how the EC’s DGComp announced Android investigation has framed the antitrust allegations against Google-Android:

  • First, “whether Google has illegally hindered the development and market access of rival mobile applications or services by requiring or incentivising smartphone and tablet manufacturers to exclusively pre-install Google’s own applications or services;”
  • Second, “whether Google has prevented smartphone and tablet manufacturers who wish to install Google's applications and services on some of their Android devices from developing and marketing modified and potentially competing versions of Android (so-called “Android forks”) on other devices, thereby illegally hindering the development and market access of rival mobile operating systems and mobile applications or services;” and
  • Third, “whether Google has illegally hindered the development and market access of rival applications and services by tying or bundling certain Google applications and services distributed on Android devices with other Google applications, services and/or application programming interfaces of Google.”

For those who know Google well, they will appreciate that Google believes that whatever Microsoft did they believe Google can do it better. They certainly have in anti-competitive behavior.

Tellingly, while Microsoft was found guilty of anti-competitively tying its dominant OS with a default pre-installed Microsoft’s browser, Google is being investigated for anti-competitively tying multiple (~20) Google apps in Android licensing agreements: i.e. Google Search as the default search engine, in addition to multiple favored Google apps: “Google Chrome [browser], Google Maps, Google Drive, YouTube, Gmail, Google+, Google Play Music, Google Play Movies, Google Play Books, Google Play Newsstand, Google Play Games, Google+ Photos and Google+ Hangouts” per The Information’s reporting per its review of Google’s Mobile Application Distribution Agreements (MADA).

Ironically, the only mobile operating system OEM licensing competitor to Android today is Microsoft Windows for mobile.

Plus ça change, plus c'est la même chose.”

Relevant Market Definition Analysis  

Apple iOS will not be part of the relevant antitrust market for the Android investigation because Android and iOS do not compete directly in the marketplace for the following reasons.

  1. Different customers: Android licenses to OEMs; Apple sells to consumers.
  2. Different product: Android licenses software; Apple sells hardware.
  3. Different economic model: Android is a wholesale model; Apple is a retail model.
  4. Different monetization model: Android harvests data for its advertising revenue model; Apple sells hardware for a premium price c consumers.
  5. Different monetization engines: Android’s customers are advertisers which makes consumers the product that Google sells to advertisers; Apple’s customers are only the consumers to which they sell their products.
  6. Different cost model: Android is licensed for free (no licensing fee); Apple iOS is a feature consumers pay for as part of the Apple integrated hardware/software product.    
  7. Different customization model: Android is a stand-alone product in the marketplace that is then intended to be customized by OEMs before offered to customers in a differentiated way; Apple iOS is totally-integrated internal software that optimizes Apple hardware and software in one way only.
  8. Different business approach: Android is a commercially and freely available universally in the marketplace; iOS is exclusive to Apple.  
  9. Different intellectual property model: Android alleges to be an open platform model; iOS is prideful about it closed walled garden platform model.
  10. Different data model: Android is a data-driven business; Apple is not.
  11. Different data protection models: Android as a wholesaler does not control the ultimate security and privacy of consumers’ data by design; Apple as a retailer by design has an interest to protect the privacy and security of their consumer-customers and their data.  

In sum, Apple iOS is not a direct Android competitor, and will not be a part of the EU defined relevant mobile operating system market for its Android antitrust investigation.

Thus Google is much more dominant in mobile operating software than conventional wisdom appreciates.

Google will be found by the EU to have upwards of 90% of the mobile OS relevant market, which is eerily comparable to their 90% shares of search and mobile search in the EU.

Ironically and tellingly, the marketplace facts in this Android investigation are highly likely to show that Google’s mobile operating system share is as dominant and lasting as Microsoft’s was before the DOJ and EU enforced antitrust law against Microsoft over a decade ago.

It is also ironic and telling that after those Microsoft antitrust actions by the U.S. and EU, Microsoft Windows is Android’s only real mobile operating system competitor today with <5% market share.

What Microsoft’s desktop OS monopolization, followed serially by Google-Android’s mobile OS monopolization should tell antitrust enforcers, and everyone else in the marketplace, is that operating system software markets appear naturally and exceptionally more ripe, prone, and vulnerable to monopolization than other markets.

Forewarned is forearmed.  



Google Unaccountability Series 


Part 0: Google's Poor & Defiant Settlement Record [5-1-12]


Part 1: Why Google Thinks It Is Above the Law [4-17-12]


Part 2: Top Ten Untrue Google Stories [5-8-12]


Part 3: Google's Growing Record of Obstruction of Justice [6-21-12]


Part 4: Why FTC's $22.5m Privacy Fine is Faux Accountability [7-12-12]


Part 5: Google's Culture of Unaccountability: In Their Own Words [8-1-12]


Part 6: Google Mocks the FTC's Ineffectual Privacy & Antitrust Enforcement [8-10-12]


Part 7: An FTC Googleopoly Get Out of Jail Free Card? [8-30-12]


Part 8: Top Lessons to Learn for Google Antitrust Enforcers [9-14-12]


Part 9: Google Mocks EU and FTC in Courting Yahoo Again [9-26-12]


Part 10: FTC-Google Antitrust: The Obvious Case of Consumer Harm [11-25-12]


Part 11: Why FTC Can't Responsibly End Google Search Bias Antitrust Investigation [11-27-12]


Part 12: Oversight Questions for FTC's Handling of Google Antitrust Probe [11-30-12]


Part 13: Courts Not FTC Should Decide on Google Practices (The Hill Op-ed) [12-10-12]


Part 14: Troubling Irregularities Mount in FTC Handling of Google Investigation [12-17-12]


Part 15: Top Ten Unanswered Questions on FTC-Google Outcome [1-3-13]


Part 16: Top Takeaways from FTC's Google Antitrust Decisions [1-7-13]


Part 17: Google’s Global Antitrust Rap Sheet [1-31-13]


Part 18: Google’s Privacy Words vs. its Anti-privacy Deeds [3-8-13]


Part 19: Google’s Privacy Rap Sheet Updated – Fact-checking Google’s Privacy Claims [3-13-13]


Part 20: DOJ & FTC Report Cards [4-12-13]


Part 21: The Evidence Google Bamboozled EU Competition Authorities [4-19-13]


Part 22: EU-Google: Too Powerful to Prosecute? Problems with Enabling Google [5-1-13]


Part 23: Google’s proposed EU Search Bias Remedies: a Satire [5-17-13]


Part 24: Google’s Antitrust Rap Sheet Updated [5-27-13]


Part 25:  Is This the Track Record of a Trustworthy Company? See Google’s Rap Sheet [6-6-13]


Part 26: Top Questions as DOJ-Google Criminal Prosecution Deadline Approaches [7-12-13]


Part 27:  The Evidence Google Violated the DOJ Non-Prosecution Agreement [8-8-13]


Part 28:  Implications of EU Ruling Google Abused its Search Dominance [9-27-13]


Part 29:  Google-YouAd is a Deceptive and Unfair Business Practice [10-24-13]


Part 30:  EU's Google Antitrust Problems Not Going Away [12-16-13]


Part 31:  How the Google-EC Competition Deal Harms Europe [2-10-14]


Part 32: Open Letter to European Commissioners to Reject EC-Google Settlement [2-16-14]


Part 33: Google’s Extensive Cover-up [2-24-14]


Part 34: Open Letter on Google’s Opposition to Distracted Driving Legislation [2-27-14]


Part 35: The Growing EC-Google Settlement Scandal – An Open Letter to EC Officials [3-31-14]


Part 36: Google’s Glass House [4-14-14]


Part 37: Google’s Titan Spy-Drones Mimic Military Spy Planes [4-17-14]


Part 38: Google’s Anti-Competitive Rap Sheet Warrants Prosecution not Leniency [4-30-14]


Part 39: Google Apps for Education Dangers --Letter to School Administrators/Parents [5-17-14]


Part 40: Google’s AdSense Lawsuit Spotlights Google’s Corruption of Unaccountability [5-23-14]


Part 41: Google’s Title II Utility Regulation Risks – An Open Letter to Investors [6-3-14]


Part 42: Six Ways the FTC is AWOL on Google [7-16-14]


Part 43: Fact-checking Google’s Public EC Competition Defense [9-21-14]


Part 44: Top 10 Reasons Why Google is Causing EU More Problems than Microsoft Did [10-1-14]


Part 45:  Google Profiting from Hacked Celebrity Women Photos “How Google Works” [10-6-14]


Part 46:  Fact-checking Google Schmidt’s “Ich bin ein Big-fibber” Berlin Speech [10-14-14]


Part 47:  Google’s Dominance isn’t Peaking its Proliferating [11-4-14]


Part 48: A European Revolution against Google’s Virtual Colonialization? [11-24-14]


Part 49:  Google’s Serial Bad Acts Harm American Interests in Europe [11-28-14]


Part 50:  Evading Sovereign Accountability is “How Google Works” [10-10-14]


Part 51:  What’s Google Really up to in Wireless [1-30-15]


Part 54: Evading Sovereign Accountability is “How Google Works” [12-10-14]


Part 55: Bullying is “How Google Works” – Ask Law Enforcement [12-21-14]


Part 56: Deceptive Branding is “How Google Works” Ask EC Law Enforcement [1-7-15]


Part 57: Breaking Privacy Promises is How Google Works - New Student Privacy Pledge [1-22-15]


Part 58: What’s Google Really Up To in Wireless? [1-30-15]


Part 59: Google’s Title II Privacy Liability Nightmare [2-6-15]


Part 60: Why is Google Obstructing Justice in Mississippi? EC Pay Attention [2-12-15]


Part 61:How America Protects National Champion Google in the EU [3-5-15]


Part 62:  FTC-Googlegate Scandal Repercussions in U.S. & EU [3-20-15]


Part 63: The Appearance of Google-USG Conflicts of Interest Grows [3-25-15]


Part 64: Googlegate -- The FTC Cover-up Evidence Piles Up [4-1-15]


Part 65: Googlegate II: The Evidence DOJ Made Google Criminal Case Go Away [4-8-15]


Part 66:  Why Google’s Running Out of Antitrust Political Tricks [4-14-15]


Part 67:  EU-Google Antitrust Charges – Google’s Hidden #1 Problem [4-15-15]


Part 68:  EU Charges Spotlight Google’s Self-Dealing Power [4-17-15]


Part 69:  Big Holes in Google’s EU Antitrust Defense  [4-29-15]


Part 70:  EU Antitrust Endgame is Google-Android Platform Neutrality [5-8-15]


Part 71:  Googlegate Email Shows FTC an Extension of Google’s Lobby/Press Operation [5-15-15


Part 72:  Google’s Antitrust Hardball Plans for the EU? [5-19-15]