What They Are Saying: Experts Continue To Point Out Flaws In EC’s Android Decision
Now a few weeks removed from the European Commission’s (EC) “bizarre” Android decision, experts have continued to weigh in. As James Stewart wrote in the New York Times, “It’s hard to find any antitrust expert, European or American, who has endorsed the logic or outcome of the ruling by the European Commission.” The EC’s conclusion is both misguided – Android faces plenty of competition, including from Apple’s iOS – and potentially harmful to phone makers, developers, and consumers.
Below is a final round-up of bipartisan critiques of the decision (Part I and Part II here and here).
The EC’s Decision Ignored The Fact That Android Competes With Apple’s iOS, Among Other Platforms And Operating Systems
—CCIA President & CEO Ed Black: “The European Commission missed the forest for the trees when it set the parameters of their legal investigation into Android devices — which for consumers is often a cheaper, viable competitor to iPhones. The starting point of the investigation should have been the obvious: immense mobile ecosystem competition between Google’s Android and Apple’s iOS. Instead, it unnecessarily narrowed its investigation to only one particular company which offers a flexible, competitive open-source platform. Over the last few years, Android has increased smartphone competition — with consumers benefiting from greater innovation and less expensive choices.”
—Former FTC Policy Director David Balto: “Indeed, Android is not among the dominant operating systems, unlike ’90s era Windows. There are multiple viable operating systems, including Windows (still the leader), Android, iOS, macOS and Fire OS. Android is only on 40 percent of consumer devices worldwide, and less than 20 percent in the United States. We have also seen a huge resurgence in competition from Apple, which captures 87 percent of the smartphone-industry profits. Apple’s iOS ecosystem is a key competitive constraint on the Android ecosystem and vice versa.”
—Former Clinton Administration Official David Goodfriend: “Despite the EC’s claims, Android provides considerable freedom to device makers, developers, and users. Android users can easily download competing apps and app stores, remove preloaded apps from their home screens, and change defaults. Rival developers are free to forge preloading partnerships with device makers and carriers.”
—International Center For Law & Economics’ Julian Morris: “The EC’s decision seems to disregard the history of smartphone innovation and competition and their ongoing consequences. In order to be able to offer Android for free to smartphone manufacturers, Google sought to develop unique revenue streams (because, although the software is offered for free, it turns out that software developers generally don’t work for free). The main way Google did this was by requiring manufacturers that choose to install Google Play also to install its browser (Chrome) and search tools, which generate revenue from advertising. At the same time, Google kept its platform open by permitting preloads of rivals’ apps and creating a marketplace where rivals can also reach scale.”
—National Taxpayer Union’s Kevin Glass: “Once again the European Commission (EC) has decided to continue its reckless campaign against American businesses with its massive fine against Google, undermining the very principles of competition and innovation the EC claims it wants to protect. Without demonstrating a shred of consumer harm on which prudent antitrust actions are normally based, the EC is betraying a radical agenda that falls back on discredited bromides such as protectionism and industrial policy.”
The EC Is Using Antitrust Law As A Cudgel Against American Technology Companies To Hamper Their Growth
—University Of Chicago Law Professor Randy Picker: “This is another exercise in platform engineering by antitrust authorities. The new decision makes a statement about acceptable entry paths for dominant firms. Google offered a new business model for operating system software and the Commission didn’t like the way it would extend Google’s dominant position in desktop search into mobile.”
—Niskanen Center’s Alec Stapp & Ryan Hagemann: “It is no coincidence that Europe, having produced very few technology superstars of its own, has chosen to fine American firms billions of dollars.”
—Georgetown University’s Larry Downes: “While the size of the fine is unprecedented, the commission’s judgment is only the latest in a series of similar but escalating punishments, restrictions, tax rulings and legislation aimed at hobbling American tech companies. Though U.S. trade representatives have largely ignored it, the European Union has been waging a one-sided Internet trade war in a failing effort to protect the E.U.’s own floundering tech industry.”
Consumers Will Be Harmed By The EC’s Decision
—New America’s Dipayan Ghosh: “Yet though the European Commission’s strategy may be aimed at protecting the individual consumer in the face of a major market player, the Google decision may actually set off a chain reaction that will result in higher prices for smartphone consumers in the medium term. And this unintended consequence reveals a particular problem with the EU’s regulatory approach.”
—The Wall Street Journal‘s Holman Jenkins: “Only on one group would there be any immediate effect, and it would be bad: The up-and-coming poor person in some less-developed country landing his first smartphone, which will likely be cheap, and likely be running the Android operating system. One hopes a considerate salesperson or knowledgeable friend will be handy to show him how to make his purchase useful by downloading the most stable, tested and invaluable (though free to the user) apps that the rest of the world is using, made by Google. The sole practical consequence of the EU’s action would be to raise an obstacle to this person’s discovery of the opportunities created by access to the world through the mobile internet. Nice work. The EU’s celebrated competition commissioner, Denmark’s Margrethe Vestager, has not made the world a better place; she has made it kludgier.”
—FreedomWorks’ Wayne Brough: “Perhaps the magnitude of the fine was alarming, but the EC’s action is just the latest in its fusillade against American tech companies that thrive by providing consumers the products they want. Despite the aggressive actions against Google, there is scant evidence of consumer harm. To the contrary, smartphones have become ubiquitous, and provide consumers a wide range of choices when it comes to the apps they use, including search engines.”
—Competitive Enterprise Institute’s Iain Murray: “There is so much wrong with this decision it is difficult to know where to start to critique it, but the first thing to note is that it will very likely harm consumer welfare, and is at odds with American antitrust doctrine. Worse, given the EU’s outsized influence on the world economy, it represents an attempt by the EU to become the world’s antitrust regulator — a move that the United States should oppose with every tool it can muster.”