This has always felt very bizarre to me. From an anti-competitive standpoint it makes sense, but from an antitrust i.e. harming the consumer standpoint, it feels a bit nebulous.
Who is actually the beneficiary of this action? It seems pretty dubious that it helps customers, after all, the whole thing stems from the fact that the customers want the Play Store.
It says that they would offer would be financial incentives for partnering with chrome and google. Is it just gonna be like "access to Google Play is $10, but if you bundle our services, we'll give you $10!"
Or is the effect that it increases the leverage of other handset makers to essentially extract rents of digital real estate from Google like Apple does?
"What is the Standard for Determining Illegal Behavior?
"The United States and European Union have, at least since the Reagan Administration, differed on this point: the U.S. is primarily concerned with consumer welfare, and the primary proxy is price. In other words, as long as prices do not increase — or even better, decrease — there is, by definition, no illegal behavior.
"The European Commission, on the other hand, is explicitly focused on competition: monopolistic behavior is presumed to be illegal if it restricts competitors which, in the theoretical long run, hurts consumers by restricting innovation."
The only problem with allowing competitors to constrain their business rivals is, well, exactly that. They are unable to compete in the marketplace, thus they rely on regulation.
I always had a hard time with that notion. It feels too ripe for abuse to me.
It’s not as simple as you are implying. Multiple times Intel made deals with PC vendors just to deny AMD access to computers. It is anticompetitive and in the ling run it damages consumers by limiting competition and innovation. Good thing that AMD wasn’t killed during those moves and now we see rise of AMD. I would not be surprised that AMD was able to catch up just because of same regulations - Intel was punished for anticompetitive actions and now playing field is more or less level.
Google is dumping prices for all products and by that it kills competition unfairly - google maps as a standalone product would not survive because it does not generate ad revenues and it’s free to use. Gmail was also unsustainable for really long time because it was free and without ads. So it’s not as simple as you are saying.
The EU doesn't have American style antitrust law that only kicks in and places restrictions on allowable behavior when you have a large enough monopoly.
The EU has competition law that places restrictions on how you can behave as soon as you have a 40% share of a given market.
Under EU competition law, once you have that 40% market share in one area, you may not use that market share as a weapon against competitors in other areas.
In this case, though, Google is alleged to be dominant in "general internet search services, licensable smart mobile operating systems and app stores for the Android mobile operating system" (per EC press release: http://europa.eu/rapid/press-release_IP-18-4581_en.htm).
I think Google has 90%+ market share in all of those, at least in Europe.
Maybe the formatting wasn't entirely clear, but "licensable smart mobile operating systems" and "app stores for the Android mobile operating system" are two different categories.
As for the latter being a thing but Apple not getting into trouble for their iOS App Store monopoly, I guess that is because Apple isn't using that "dominant position" to prop up a dominant position in another market (like Google is propping up their dominance in search engines).
Or maybe the overall consumer harm is considered to be much smaller, considering that Android has 80% smart mobile device market share in Europe (according to the EC press release), and iOS has a much smaller share.
I believe even if that lesson is set, it would be beneficial. As it leaves a space open for another player in smart mobile operating system -- in turn creates more competition in the market. By giving Android for free, the market stayed duopoly.
Android is dominate in cell phones, even if you count the iphone. I don't know the numbers for the EU, but worldwide Android is larger than the 40% threshold to be considered a monopoly in the EU.
If you're interested, 2018 statistics show Android's share of the smartphone space as 54% in the US, 73% in Europe, and 88% globally, all above the 40% threshold.
>As you describe it, it is the same style, but the market fraction is a lower number.
The intent is different too.
The EU is looking to protect a healthy level of competition in the marketplace, while we in the US have moved the goalposts to "can you prove this particular monopoly is doing consumers harm"?
Which allows companies that produce superior services to thrive. Want more money? Create better goods and services - don't rely on the government to harm the market leader just to give you a heads up.
America's "hands off" approach to regulation has allowed the country to produce companies that much of the world envies.
"access to Google Play is $10, but if you bundle our services, we'll give you $10!"
is unlikely to be different from "free" in the eyes of regulators. But it does clarify what particularly is the concern the regulators are interested in -- how much of discount is implied in the servicde-bundle placement.
It's reasonably different, because Bing, DuckDuckGo, and Yandex could outbid for that search placement (and Firefox could arguably offer up as an alternative to Chrome), so Google has to pay at least as much for browser/search placement as it's competitors will.
Meanwhile, if they offer to pay too much, OEMs can replace the app store and the other apps with cheaper alternatives, and just profit off the high incentives to load Chrome and Search, and Google loses it's grip on the Play Store's market.
The license fee adds a lot of incentive for OEMs to consider alternative app markets: Imagine if Samsung offered developers an app market with a 10% cut instead of Play's 30% cut. Would that move the needle on getting developers on board with a competing app market? Sure, Samsung wouldn't pull as much in on it, but they'd be avoiding the license fee to pay Google too. Secondary effect of this that will also spur on competition another way: If this happens, Google might consider dropping it's own rates to compete.
On both sides of this kinda split-bundle arrangement, Google will need to maintain a competitive offer or else competitors will swoop in, whereas before, OEMs didn't have any choice in the matter because it was all or nothing.
Bear in mind, Google has to pay Apple and Firefox billions to keep Google as the default search, but Android OEMs were being forced to keep search as the default for free. So yeah, the Play Store will have a license fee, but Google now has to pay up to hold onto search dominance.
Who is actually the beneficiary of this action? It seems pretty dubious that it helps customers, after all, the whole thing stems from the fact that the customers want the Play Store.
It says that they would offer would be financial incentives for partnering with chrome and google. Is it just gonna be like "access to Google Play is $10, but if you bundle our services, we'll give you $10!"
Or is the effect that it increases the leverage of other handset makers to essentially extract rents of digital real estate from Google like Apple does?