Google Contracts Forcing Search, Apps On Android Partners — Report
The Information is reporting that it has seen “confidential documents … [that] show Google has been adding requirements for dozens of manufacturers like Samsung Electronics, Huawei Technologies and HTC that want to build devices powered by Android.” These requirements regulate the number of Google apps that must be pre-installed on handsets as well as the […]
The Information is reporting that it has seen “confidential documents … [that] show Google has been adding requirements for dozens of manufacturers like Samsung Electronics, Huawei Technologies and HTC that want to build devices powered by Android.” These requirements regulate the number of Google apps that must be pre-installed on handsets as well as the specific placement of those apps within the handset — and most importantly, Google search on the homescreen.
The Information explains:
Among the new requirements for many partners: increasing the number of Google apps that must be pre-installed on the device to as many as 20, placing more Google apps on the home screen or in a prominent icon folder and making Google Search more prominent.
The article goes on to illustrate with various examples the increasing specificity of Google’s placement and user-experience requirements of its Android manufacturing partners.
These terms appear in licensing contracts called Mobile Application Distribution Agreements (MADAs). While it’s true that any company can use the Android OS and “fork it,” as Amazon has done, if hardware makers want access to Google Play and the most recent versions of Android they must sign a MADA.
This is the way that Google seeks to assert control over the premium tier of the Android ecosystem and create a consistent user experience across devices. There’s a pending US class action lawsuit that argues these MADA contracts are a form of illegal tying (in the realm of antitrust) and have harmed consumers by keeping Android handset prices higher than they otherwise might have been.
That specific pricing claim is unlikely to be persuasive. However the degree of control that Google is now asserting over the big Android OEMs such as Samsung, Motorola/Lenovo, Huawei, HTC, Xiaomi and others could soon become a major antitrust problem outside the US and specifically in Europe — notwithstanding Google’s claims about Android being open-source.
Europe is in the preliminary stages of an Android antitrust inquiry even as it has yet to conclude the Google search antitrust investigation. And while finding a remedy for the Google’s alleged anti-competitive search behavior is inherently challenging and problematic, finding one for the MADA-related complaints is easier: eliminate the pre-loading and app placement requirements.
The US Federal Trade Commission previously declined to take any action against Google for tying or other alleged anti-competitive behavior related to Android.
Google’s tightening of control over the tier-one Android experience is partly driven by competition with Apple, including the need to create a user-experience that rivals the iPhone and a developer environment that is less fragmented. However it’s equally driven by an imperative to generate more mobile search usage and revenue.
In one sense Google is just responding rationally to the marketplace and changing user behavior. The consequence of all this, however, is that Google has increasingly reduced its handset-maker partners to near-commodity producers of Android hardware, with variations in materials, screen size, camera quality and some software at the margins.
IDC projects that Android’s global share of the smartphone market will reach 80 percent this year. By contrast, StatCounter shows that Android’s share of traffic from smartphones and tablets is 49 percent.
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