Google Buys Jibe to Force Android as Web’s Default Means of Communications

Don’t miss the sweeping antitrust, privacy, security, and EU-U.S. Data Safe Harbor ramifications of Google-Android’s power grab and highly-strategic acquisition last week of Jibe Mobile’s “Rich Communications Suite” (RCS), the world’s leading, mobile-carrier, messaging platform/standard.


Simply, Google has just acquired the single missing strategic piece holding Google back from being able to centralize the recording, data transfer and analysis of most global mobile communications like it has already centralized the collection, data transfer, and indexing of the world’s digital information.

Google is poised to quickly transform Android from the world’s dominant licensable mobile operating system into the world’s default mobile operating+ communications system, to functionally disintermediate and effectively control a wide swath of market players dependent on a neutral Android to reach and communicate with their users and partners.

This analysis spotlights why Google’s recent acquisition of Jibe Mobile’s RCS platform represents a new antitrust systemic risk to the Android ecosystem. Those most at risk from Google’s potential anti-competitive disintermediation of Internet messaging/communications are: Facebook, device OEMs, app developers, mobile carriers/ISPs, automakers, and other Internet of Things businesses.

This analysis also spotlights how resolution of the just-struck-down EU-U.S. Data Safe Harbor Agreement could be complicated further by Google-Android’s RCS upcoming data-transfer grab, given that the EU and the FTC are currently investigating Android for anticompetitive tying and bundling, and given the fact that Google already is involved in roughly half of all global data transfers in one way or another.

One should expect the EU, the FTC and other antitrust authorities like Russia, India, and Brazil to eventually investigate the sweeping antitrust/privacy implications of Google attempting to leverage its data dominance into dominating Internet global communications via its acquired Jibe global RCS standard. Remember Google has a directly relevant history of abusing ownership of global communications standards. In 2012 both the EU and FTC antitrust authorities had to sanction Google for anti-competitively abusing the licensing process for global communications Standards Essential Patents that it acquired from Motorola.

Moreover, scrutiny of what a Google-controlled-RCS global communications standard could mean, will necessarily lead to mass surveillance/NSA-spying concerns given Google’s surveillancemodel and Google’s business track record of serial widespread wiretapping without users or partners knowledge or consent, spanning WiFi, Gmail, Chrome, Nest and Glass. Furthermore, Google’s non-neutral, mass collection of customers’ proprietary network information (CPNI) via its centralized RCS cloud storage should also attract U.S. FCC scrutiny given that Google Fiber and Google Fi wireless are now FCC regulated Title II common carrier services, subject to more strict utility privacy regulation.    



New Antitrust Systemic Risk to the Internet Ecosystem

Jibe Mobile is “the leader in cloud communications for mobile operators,” and the leading global purveyor of Rich Communications Suite (RCS) for mobile carriers globally. RCS is a GSM mobile carrier “standard” that enables IP multimedia. RCS is a standardized system of protocols and APIs for messaging that enable and make more seamless every current core function of Internet communications: instant messaging, voice, group video calling, file transfer, content/photo/video sharing/distribution, presence info, geo-location awareness and exchange, address book, blacklist filter, etc. – hence the apt name “Rich Communications Suite” – now powered by Android.

Simply, Google’s de facto ownership, integration and control of RCS, combined with Android’s global dominance of licensable mobile operating systems, could enable Google to quickly accomplish two strategic disintermediation priorities -- by default.

First, Google could divert most Android-enabled communications traffic being processed by everyone else’s cloud servers now, to Google’s centralized data centers so Google can centrally track, record, and analyze most all Android-enabled Internet communications traffic for the purposes of monetizing the data for advertising and for machine learning/AI.  

The EU Court’s recent sweeping decision to strike down the EU-U.S. Data Safe Harbor Agreement is exceptionally relevant here because Google is involved in one way or another in roughly half of all data transfers between the EU and U.S. If Google forces RCS to be the mobile Web’s default means of communication via Google’s data centers that would substantially increase Google’s already outsized share of EU-U.S. data transfer flows. Note: 60% of Internet devices and users already exchange traffic daily with GoogleNet’s servers; >50% of websites’ traffic already involves Google analytics, hosting and ads daily; and ~25% of the Internet’s daily traffic already is Google, per Deepfield research. These data flow statistics expose Google as the entity most affected by far by the EU Court striking down the EU-U.S. Data Safe Harbor.

Second, Google could embed (or at a minimum default preference/tie-bundle) Google’s core communications-related app functions directly into the Android-licensed operating system. Those encoded default communications gateways could preference Google’s: search/Internet-address-book, Hangouts/RCS-communications, Gmail, Chrome/browser, Drive/cloud-storage, Maps/location-services, YouTube/video-distribution, Photos/sharing, even Google-backed HTTP/2 encryption over Google’s proxy servers, etc. – all under the PR guise of RCS innovation and improving device and communications speed, efficiency, and privacy performance for users.

This anti-competitive, omni-disintermediation also could happen very quickly, if antitrust authorities and privacy regulators do not catch on to this brilliant and breathtaking power grab in time. Jibe Mobile’s RCS platform was Google’s only missing link in the chain in global connectivity capabilities that Google needs to pull off this potential Android coup.

In a matter of months, Google could release a new Android update with embedded RCS and RCS-preferencing for Google’s leading functional communications capabilities. Google’s own RCS app already has a billion downloads, Google already boasts 1.4 billion Android devices, and it already is shipping over a billion new Android devices annually. And there is no user-adoption friction involved because if Google can force OEMs to embed Google’s proprietary-RCS by default, users do not have to do anything but use their device. Google knows most users will reflexively use whatever the default is, because it is assumed to be the best and to be a hassle to change by most users.

This all means Google could embed/bundle its proprietary, preferencing-RCS in most Android devices globally within 3-4 years. Those who are skeptical of this quick timeline should examine how Android tying already has enabled Google to drive extraordinarily fast user adoption in less than three years for several Android-bundled, communications-related Google Apps: Chrome browser by ~800m users; Google Play App store by ~750m users; Gmail by 650m users; YouTube by ~600m users; and Maps by ~400m users.



Those Most at Risk of Android-Forced RCS Communications Disintermediation

Facebook – Currently Google does not have an Android Messenger capability similar and successful to iMessage; Facebook has filled that void with Facebook Messenger and by buying WhatsApp for a whopping $19b last year. By making Google RCS the embedded default in Android, in one fell swoop Google: could grab Facebook/WhatsApp users that do not actively choose to install Facebook Messenger/WhatsApp on their new Android device; could divert monetizable social interaction traffic/data from Facebook’s private servers to Google’s servers; and could siphon off some of Facebook’s growth and profitability.

Original Equipment Manufacturers (OEMs) & App Developers -- Embedding RCS in Android significantly increases Google’s market power as the dominant licenser of mobile operating systems over OEMs and as the only app store for Android apps, because Google can take control of relatively more of the value-add and value-creation in this compressing supply chain. Google also is becoming the default platform (and communications metadata collection funnel) for when apps need to communicate among one another. Forcing the routing of communications between apps through Google’s data centers strengthens Google’s tracking control of the valuable metadata of who is going where, when and roughly for what, which in turn increases Google’s relative market power in the monetization of apps via advertising.

Carriers/ISPs – Embedding RCS in Android is a classic Trojan horse maneuver. That’s because this is all about appearing to be bearing gifts to carriers (“bring RCS to a global audience”) when this is really about forcing the current carrier-aligned, revenue-generating, Jibe Mobile cloud model into Google’s ad-driven cloud model. Simply, Google-RCS is about Google forcing mobile carriers’ revenue-generating, messaging services to become a free Android feature that only Google can fully monetize via advertising. Google Android’s forced tying could dramatically accelerate the free messaging share gain of free social media communication, a trend Juniper research estimated cost mobile carriers $14b in lost revenue in 2014, by diverting these RCS communications from a carrier-aligned data center onto GoogleNet’s data centers. In a nutshell, embedding RCS in Android accelerates Google’s multi-front effort to commoditize Internet connectivity globally via forcing a “dumb pipe” Internet model.      

Automakers -- Android Auto is a Trojan horse scheme with automakers as well. Recently Porsche refused to allow Android Auto to be deployed in its cars because Google’s manufacturers’ agreement demanded access to ancillary car performance data relating to: vehicle speed, throttle position, coolant and oil temp, engine revs, etc. Other automakers have voiced concerns about Android Auto trying to take control the value-added and differentiated, software operating system “brain” of the car, forcing commoditization on car hardware manufacturers. An RCS-enhanced Android Auto could create a privacy-invading slippery slope dynamic where Google could require an increasing amount of data collection necessary to make Android Auto work as it is marketed to users. Apparently, Google has adopted a camels-nose-under-the-tent model for Android Auto. It has learned from experience, first-mover advantage matters, so it will initially agree to data collection limitations to get embedded in automaker’s vehicles, knowing it can use updates to de facto serially re-negotiate the initial deal and force access to more and more private data to make future Android Auto features/apps work as they are re-designed. Tellingly, Google also has a well-established history of secretly hoovering up private data without the knowledge or consent of users or partners. In at least five different Google product categories -- WiFi, Gmail, Chrome, Nest, and Glass -- Google was caught effectively wiretapping users secretly and illegally without their consent. This all could mean that Google’s RCS-enhanced Android Auto could be on a collision course with the automobile industry’s 2014 pledge “to protect and respect consumer privacy.”  




Google has a long history of buying highly-strategic acquisitions before others recognize they are important and then combining them to quickly leverage its market power into an adjacent market: Keyhole in 2004 became dominant global Google Earth/Maps; Android in 2005 became the dominant global Android mobile operating system; YouTube in 2006 became the dominant global Internet video distributor; DoubleClick in 2007 extended search advertising dominance into all digital advertising leadership; and AdMob in 2009 extended desktop advertising dominance into mobile advertising leadership.

Jibe Mobile fits this brilliant Google acquisition pattern. It is the lone missing link that connects a powerful Google chain of sub-optimized global communications technologies, software and data center/caching infrastructure.

The market power and network effects that Google can leverage here via this acquisition are off the charts – sans antitrust and privacy enforcement vigilance.  

Key market players in the Android ecosystem -- Facebook, device OEMs, app developers, mobile carriers/ISPs, automakers, and other Internet of Things businesses -- should be concerned about how Google can potentially quickly and effectively disintermediate and devalue their businesses -- if they and antitrust and privacy authorities are not vigilant.

In Eric Schmidt’s book “How Google Works,” Google effectively alludes to its grand strategy of global dominance: leading in the three core legs of the Internet stool:  information, computer processing, and connectivity/communications. Google has long dominated the information business and has long led globally in raw computing power and efficiency. Now with its dominant global Android operating system, enhanced with owning and controlling the global RCS standard missing piece, and enabled by the world’s best and most distributed IP communications/data center network – Google is poised to also dominate global communications in the next few years – absent vigilant antitrust and privacy enforcement.   

In sum, this analysis connects the dots for antitrust authorities in the EU, the FTC, Russia, India, and Brazil, and also for the market players most threatened by Google’s clever plan to anti-competitively leverage its global Android mobile operating system dominance to dominate global IP communications services in the years ahead – absent vigilant antitrust and privacy enforcement.    

Forewarned is forearmed.




Scott Cleland served as Deputy U.S. Coordinator for International Communications & Information Policy in the George H. W. Bush Administration. He is President of Precursor LLC, an emergent enterprise risk consultancy for Fortune 500 companies, some of which are Google competitors, and Chairman of NetCompetition, a pro-competition e-forum supported by broadband interests. He is also author of “Search & Destroy: Why You Can’t Trust Google Inc.” Cleland has testified before both the Senate and House antitrust subcommittees on Google and also before the relevant House oversight subcommittee on Google’s privacy problems.


GoogleNet Disintermediation Series

Part 1: Will Google become Softbank-Sprint’s Silent Partner? [10-18-12]

Part 2: DropCam Key to Google’s New Ubiquitous Surveillance Network [6-24-14]

Part 3: Google’s WorldWideWatch Over the WorldWideWeb [9-14]

Part 4: The GoogleNet Playbook & Zero-Pricing – A Special Report [11-18-14]

Part 5: What is Google Really Up to in Wireless? [1-30-15] 

Part 6: Google Android has 90% OS share because Apple iOS isn't a direct competitor [5-29-15]

Part 7: The FTC-Created Google Android Mobile Monopoly is Anti-Privacy by Design [6-5-15]

Part 8: Widespread Wiretapping is “How Google Works” [6-24-15]

Part 9: Google Epitomizes Cyber Systemic Risk [9-11-15]