If only the 2012 FTC appreciated “an ounce of prevention is worth a pound of cure,” the Simons-FTC would not be left to treat and contain the now evident, out-of-control, Androidopoly epidemic.
Google’s 2012 search-syndication monopoly scale has rapidly metastasized Google’s market power in scope to: Android licensable OS, Google Play app store, Google Location Services, Chrome browser, Google Maps, and YouTube video.
Lax 2013-2017 FTC antitrust enforcement has consequences.
The evidence today indicates that in 2013 the FTC likely could have prevented Google from fully extending its PC search-syndication monopoly into a global mobile ecosystem-wide Androidopoly, but instead secretly shut down its 2012 Android antitrust probe without a vote and apparently has done nothing about it for over five years – forcing reluctant EU antitrust authorities to do the prior FTC’s and DOJ Antitrust Division’s jobs for them.
Ironically Google, and it’s current Android mobile operating system monopoly exist today largely for two big reasons.
First, the DOJ successfully sued Microsoft for abuse of monopoly power in crushing the new Netscape Internet browser by illegally tying its dominant Windows operating system with Microsoft’s Internet Explorer browser. Google would have died in the crib like Netscape did if Microsoft could have tied its Bing search to its monopoly Windows operating system and Office suite.
Second, the FTC secretly shut its Android operating system tying investigation when the FTC knew Google was contractually tying its operating system with access to its dominant search services, and when it knew Android had “grown exponentially” from 2008-2012 from 0% to 70% market share of smartphone shipments!
Google could not have become a much bigger and broader out-of-control monopoly, but for the exceptionally lax Google antitrust enforcement by the FTC and DOJ – see here, here, here, here, here, here, here, and here.
EU antitrust authorities reportedly plan to rule in ~July that Google illegally abused its dominance by requiring device manufacturers and carriers that use Google’s Android mobile operating system, to pre-install Google Search, Chrome, and other apps, creating Android OS and Google Play app store >90% monopolies.
The EU is signaling a multibillion dollar fine and prohibiting Google from contractually tying Google’s many dominant apps to Android going forward. (See 2016: EU Statement of Objections, EU Factsheet, and Google-Android Infographic)
What this will mean for the FTC (and DOJ) is that the EU, that comprises 500m people and over a fifth of the world economy, will have ruled in 2017 that Google in the EU is dominant in general Internet services and has abused that dominance in comparison shopping, and plan to rule in 2018 that Google has abused its dominance in general Internet search again to illegally extend its dominance into the Android markets of licensable smart mobile operating systems and app store for the Android mobile operating system.
Last June it was telling that the Trump Administration and Congress did not come to Google’s defense when the EU ruled Google was a search monopoly, abused its monopoly in comparison shopping, and fined Google $3b.
To the extent the Simons-FTC is evidence-based in its review of the prior FTC’s Google-Android antitrust non-enforcement stance, they will find overwhelming evidence that the expected EU-Android decision is solid and highly analogous to the seminal U.S. v. Microsoft antitrust precedent.
What’s Happened Since the FTC Secretly Shut its Google-Android Antitrust Probe?
Android tying proves monopolistic: The 2011 Android contracts with device manufacturers and carriers (that the 2012 FTC investigators had to have seen) that required Android licensees to pre-install Google search, location services and Chrome, and prominently display ~15 more Google apps, turned out to be highly effective, because today, 16 of the top 20, or 80% of the most downloaded Android Apps are Google’s, see here.
Mobile OS competition crushed: From 2012 to today, the number of licensable mobile operating systems went from five to one, Series 40, Windows, Symbian, Samsung, and Android, to just Android, per StatCounter. [Note: Apple iOS is not included because it can’t be licensed.]
All Google’s major mobile competitors vanquished/coopted: From 2012-2018, all of Google’s major competitors or potential competitors have been vanquished or coopted. Telling timeline here.
· Microsoft-Yahoo: Android’s tying effectively foreclosed competitive entry into mobile by the 2010 DOJ-approved combination of #2 Yahoo and #3 Microsoft-Bing.
· Yahoo-Google: Ironically, Yahoo has partially partnered with Google search, in a way similar to the search-advertising partnership that prompted a threatened Sherman Section 1 & 2 suit in 2008 from the W. Bush DOJ that effectively blocked the then proposed Google-Yahoo Ad Agreement.
· Facebook-Microsoft: Evidently in 2014 Google broke-up the Facebook-Microsoft search partnership that Microsoft needed to have any chance to compete in mobile in 2014 when Google abruptly shut its then top strategic priority, social advertising business Google+, and Orkut, which was followed by Facebook shutting its search ad partnership with Microsoft a few months later. See here, here, and here. The public evidence that this was illegal cartel behavior is compelling, especially since Google and Facebook’s joint share of digital advertising growth spiked and accelerated coincident with the Google and Facebook ceasing to directly compete in each other’s core businesses, and because of the nineteen most downloaded Android apps, Google has sixteen and Facebook the other three.
· Apple-Google: Google took away Microsoft Bing’s third key partner in competing with Google, Apple. In September 2017, Apple dropped Bing entirely for search-related services like Siri and contracted with Google.
Google search-syndication tying: Evidently, Android has tied its way to a ~95% mobile search/advertising syndication by dominating search advertising in both the Android and Apple mobile ecosystems. When the FTC or DOJ issue civil demands (subpoenas) for syndication contracts with Google, they will see plainly that from 2012-2018, Google has successfully extended its 2012 ~70% share of PC syndication of search/search-advertising, to ~95% of mobile search/search/advertising syndication today.
Game. Set. Match.
If the FTC and DOJ consider competition for innovation, choice, and quality in the overall mobile ecosystem marketplace important, and they believe the U.S. v. Microsoft antitrust precedent to be a good predicate for evidence-based antitrust enforcement in the 21st century, they will seriously investigate and prosecute Google-Android’s pervasive, easy-to-prove, monopolistic tying behavior, like the EU has.
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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 internetization consultancy specializing in how the Internet affects competition, markets, the economy, and policy, for Fortune 500 companies, some of which are Internet platform competitors. He is also Chairman of NetCompetition, a pro-competition e-forum supported by broadband interests. Cleland has testified seven times before the Senate and House Antitrust Subcommittees on antitrust matters. Overall, eight different congressional subcommittees have sought his expert testimony a total of sixteen times. When he served as an investment analyst, Institutional Investor twice ranked him the #1 independent analyst in communications. He is also author of “Search & Destroy: Why You Can’t Trust Google Inc.”
