Google Antitrust Lawsuit Shows Company Took a Page out of Microsoft’s Book

Google was once again in court last month defending its Android operating system. The cause this time was an antitrust lawsuit in which the plaintiffs are challenging Google’s restrictions of Android handset manufacturers like Samsung.

Turn on an Android device and you’ll typically find the full suite of Google apps and services like Gmail, Maps, Chrome and the Play Store. On most US Android devices, these apps are set up by default.

Why? Because makers are restricted by agreements they’ve signed with Google, so-called “MADA’s” (Mobile Application Distribution Agreements), which set the terms for how device makers can use the Android operating system.

Under the terms of these agreements, Google requires all phones running Android with Google Play Services (which in the U.S., means almost all Android phones) to set Google’s applications as the default apps on the device. This means no Bing or Yahoo! Mail by default, and no rival app stores. Users can still install most of these third-party apps through the Google Play Store, but the lawsuit alleges that these restrictions on device makers make Android phones more expensive.

Google’s Moat Looks a Lot Like Microsoft’s

Now if this complaint seems familiar, that’s because it is. Not that long ago, Microsoft faced an antitrust suit over how it used its control of Windows to set Internet Explorer as the default option, to the detriment of its competitors like the now-defunct Netscape. The lawsuit against Google includes this comparison, which the Silicon Valley company of course denies.

But Google’s tactics in the smartphone wars of the last decade do bear a striking resemblance to Microsoft’s strategy for snuffing out the competition during the browser wars. In its antitrust case, Microsoft argued that Internet Explorer was a feature of its operating system and not a separate product. Google’s reasons for closely controlling its open-source Android operating system are similar.

How Google Controls Android

Today, what most people think of as Android is really two separate parts. The first part is the open source piece, the Android Open Source Project (AOSP). And the second part is all of Google’s apps, which are all closed source.

With each update, Google moved more and more of the core Android apps from the AOSP to closed-source Google-branded apps. When Google launched its own version of an app, work on the AOSP version ceased. And Google didn’t stop there, as it has also moved more and more of Android’s core API’s (Application Programming Interface) into its apps.

In part, this was done to help combat the device fragmentation that came from working with so many different handset manufacturers. Most Android devices still run outdated versions of the Android operating system, and many older Android devices can’t support newer versions of Android.

Moving more API’s into Google’s own apps meant the company could update many of Android’s core functions through the apps rather than at the operating system level. Since apps can update automatically on your phone, they get updated much more frequently than they do the whole operating system, which typically requires the user to agree to install the update. As a result, moving more functionality from the OS level and into Google’s apps helps to reduce the negative effects of Android fragmentation. Users with older Android phones can still take advantage of all of Google’s apps, and developers can use more of the latest features and API’s that Android offers.

But like with Microsoft’s decision to bundle Windows and Internet Explorer, moving Android away from open source isn’t just about benefiting consumers. Moving more functionality to Google’s closed-source apps also devalues the open source part of Android and offers Google much more control over the operating system. Google wants to control the platform. Google’s power over Android comes from its core apps, including Gmail, Maps, Hangouts, YouTube and the Play Store. These are the killer apps for Android, and they’re the ones most consumers want on their phones

That, in a nutshell, is why almost all of U.S. Android devices are using Google’s Android. It’s also the source of most of Google’s ongoing tensions with Samsung. Google effectively uses access to its apps and services as a lever to control handset manufacturers and ward off competition from new operating system, much the same way Microsoft used its control of Windows.

Fortunately for Google, this particular lawsuit doesn’t seem likely to go very far. The federal judge overseeing the case said that she found the claims too vague and that she would require the plaintiffs to file more evidence in order for the proceedings to continue. But the case is still an important one. It offers a glimpse into how Google controls Android, even though the operating system is technically free and open source.

Filed under: Platform Innovation | Topics: android, Google, microsoft, platform economics, platforms