Android: where’s the evidence of any harm done?

On Wednesday, the EU’s competition commissioner, Margrethe Vestager, announced she was fining Google €4.3 billion for using its Android mobile operating system to illegally “cement” its dominant search position. This follows a €2.3 billion fine on Google Shopping and the as-yet-to-be-decided sanction on the AdSense advertising platform, both inherited from her predecessor, Joaquín Almunia. But the Android case was brought by Vestager and clearly sets out EU policy in this area.

The only problem is the basis for the case. Imposing sanctions and seeking remedies to the violation of the laws of free competition requires proof of harm. Antitrust laws do not exist to punish successful businesses: that would be a contradiction. What they penalize are either activities to block other competitors, or damage to other parties, in this case app developers, phone manufacturers and most importantly, consumers.

Has Android ticked any of those boxes? Let’s examine the three conditions of Android’s deal with phone manufacturers: firstly, the compatibility agreement, which aims to prevent Android from creating platforms with different manufacturers that are incompatible with each other. Does this clause tie the hands of manufacturers in any way? No, because the agreement is not mandatory, manufacturers can refuse to sign it, use the part of Android they deem appropriate and create their own version, as CyanogenMod did, which is used by several manufacturers. Similarly, Amazon chose to create its own operating system version for its devices as an independent fork based on Android. Does that work? Sure, but it makes life hard for users, who no longer know if their favorite apps will work that environment, in some cases forcing the creators of apps to develop specific versions for certain environments.

Second condition: the mobile application distribution agreement, which means that manufacturers subscribing to it have to include eleven Google applications in the operating system. Again, a non-mandatory condition: manufacturers can stay out of the Google ecosystem if they see fit, and I have, in fact, devices that did not include those apps. The result? Manufacturers tend to opt in, because in general users want these apps, and if they supply devices without them, people will simply install them anyway, which is a waste of everybody’s time.

The third condition is about sharing profits: if the phone manufacturer agrees to the first two points, they will get a percentage of the revenue generated by those Google apps.

And in return for all this? A vast, open platform that gives manufacturers a lot of freedom when it comes to making decisions, which offers app developers consistency and stability — less so than iOS, but manageable — and a system that allows them to monetize their creations, albeit less systematic than Apple’s, but potentially more important because of its scale. Consumers get a platform that facilitates the arrival to market of a diverse range of phones and tablets starting at around €100 and up to €1,000 that can more than hold their own against Apple. In other words, a dynamic ecosystem that has proved a hit with consumers, has driven greater connectivity, providing mobility to new segments of users. Android’s role in the expansion of connectivity at all levels is clear and there is no evidence that Google has taken advantage of its position to impose abusive conditions on its development or adoption.

In which case, what harm has been done? European consumers are happywith Android and have made it the absolute global leader. Developers have a platform for their apps and more than two million of them in Europe alone work on it systematically. Finally, manufacturers get an agreement with clauses they can ignore, but that if they decide to comply with them, generally give them advantages in selling their products.

So if neither manufacturers, nor developers, nor consumers are harmed by Android’s dominance, and its positive impact on expanding connectivity is clear to all… just what is it exactly that Margrethe Vestager hopes to achieve with this record-breaking fine?

This is simply a show of force that will generate legal ambiguity. What is the EU’s problem with technology? Does it help people in any way, or is it creating a wasteland that is driving technology developers to the United States and China, fearful of a hostile environment in Europe?

What’s more, how will Vestager’s fine correct the alleged harm Google has inflicted on the competition? How is Google going to correct it? Is it supposed to create an Android for Europe? Will this mean that after buying a smartphone, European consumers will have to jump through a series of hoops to put the apps that Google would have provided them with anyway?

This is clearly a political decision that ignores the fundamentals of antitrust legislation and instead is about making headlines and somehow being seen to be doing something, however mistaken that something is. In short, an unfathomable decision and a road to nowhere.

(En espa?ol, aquí)