Google fails to understand its obligations as a monopolist

google header

In a stunning display of willful ignorance Google appears to not realize it is a monopolist.

With 93% of the search market in Europe and 76% of the smartphone market (88% worldwide) Google is obligated to behave a bit differently from its competitors, which is exactly why the EU is accusing it of abusing it market dominance.

In its response to the allegations Google spent much time comparing itself to its non-monopolist competitors, including Windows Phone, which has less than 4% market share, clearly failing to understand the issue caused by forcing OEMs to pre-install their suite of apps and prominently feature its search bar to get access to the essential Google Play store and other foundational proprietary components needed by Play Store apps.

Real Estate

Google explained that they needed to keep a tight rein on their OEMs to prevent fragmentation, and that their pre-installed apps were only 1/3 of the usual pre-installed load. This of course ignores complaints that Google retaliated against OEMs who did not toe the line including preventing them from releasing both Google Play and AOSP devices.

Additionally Google explained that they needed to pre-install the Google Search bar to keep Google’s version of Android free, tacitly confirming that search was their major revenue driver from Android. Given that Google had a search monopoly using their profits from search to undercut proprietary competitors like Windows Phone is exactly the kind of monopoly behaviour (using profits from one monopoly to create another) which is illegal.

Google writes:

Finally, distributing products like Google Search together with Google Play permits us to offer our entire suite for free — as opposed to, for example, charging upfront licensing fees. This free distribution is an efficient solution for everyone — it lowers prices for phone makers and consumers, while still letting us sustain our substantial investment in Android and Play.

In the early 2000’s Microsoft could have equally said that bundling Internet Explorer with Windows and preventing OEMS from selling both Windows and Linux PCs was efficient for computer users and the market.

In short Google’s excuses would not have stood 10 years ago, and with their search and phone monopoly even more secure now will certainly not. Google should be required to give access to their Play store to any competitor under reasonable terms, for example allowing Microsoft to install it on a mobile OS of their choice without being required to install Google’s other suite of apps and search bar, and allow other companies to provide a real choice to the market.

Google – you are a monopolist. Start behaving like one.