This case is so incredibly weak.
It won't get past the "monopoly" question, and then everything goes away. Which is a shame, because I'd like to see the silly arguments the DOJ would try to make about how Apple uses SMS and green bubbles.
But this case is going nowhere.
Don’t say that. Seems the DOJ is building their case on the European Commission's (EC) 2018 Android Decision (Decision) finding that Google had abused multiple dominant positions in relation to the Android mobile operating system platform to target Apple on the same metrics. As EU have put in to practice many new anti trust measures over the decades while the DOJ have limited experience with it.
Apple and Google are not direct competitors in relation to smart mobile OS and app stores
One of the most disputed aspects of the case concerned market definitions and Google's dominance in the worldwide market (excluding China) for (i) licensable mobile OS and (ii) Android app stores.
Google's key argument was that the EC wrongly focused its assessment on OEMs but failed to properly consider the competitive pressure from Apple app stores and OS in relation to users and developers.
- The General Court confirmed that Android and iOS are not in the same market since Apple does not offer to license its iOS to other OEMs. In relation to users and developers, the competition is only indirect and Apple does not exert sufficient indirect competitive pressure on Google to constrain its conduct. The General Court agreed with the EC's analysis that due to switching costs and users' loyalty to their OS, users would not switch to Apple in case of a small but significant non-transitory decrease in quality of the OS (the SSNDQ test). As users would not switch, the same is true for developers, who would not abandon Android's large user base.
- The General Court acknowledged that the SSNDQ test, which has never been used before by the EC, can be a useful tool in the analysis of zero-price markets and that the test does not require a specific or precise quantification of degradation of quality.
- The General Court also shed some light on the assessment of digital markets in general, acknowledging that parameters such as innovation, user behaviour or network effects may be more important than price. It also stated that in a digital "ecosystem" relevant markets may overlap. The markets at issue in the Android case were considered "distinct but interconnected".
Google's tying of the Play Store with Google Search and Chrome browser created a competitive advantage that competitors could not offset
Google required OEMs to pre-install the Google Search app and Chrome browser, as a condition for licensing its Play Store.
The General Court noted that the EC correctly relied on the same legal test as in
Microsoft v. Commission (
T-201/04) by examining the actual effects of the practices to establish harm to competition.
It added that when a conduct covers several years, the restriction of competition may be established by finding that practices have eliminated or hampered sources of competition which would otherwise have taken place or developed.
The General Court concluded that even though theoretically OEMs could pre-install the competing apps or users could download them, these were not credible alternatives for Google's rivals, in part because
status quo bias renders users reluctant to download alternative apps, and partly because of the combined effect of Google's agreements with OEMs, which prevented OEMs from installing a competing app to Google Search and from setting competing browsers as default.
The General Court also considered that
there is no practical difference between a default setting and pre-installation as their effects are similar. The Court considered a range of evidence, including behavioural data on user switching, in coming to its conclusion, which supports the EC's position that it can consider new types of evidence when bringing cases, especially in the digital sphere.
The General Court also
rejected Google's argument that its conduct was objectively justified as necessary to monetise Google's substantial investment in Android and ensure that it remains free. The General Court found that the practices were not necessary as Google had other significant sources of revenue to finance Android.
Protection of the Android "ecosystem" cannot justify the exclusion of non-compatible Android open source forks from the market
In the Decision, the EC had found that Google's AFAs prohibited OEMs who distributed devices with Google apps to also distribute devices with open source versions of Android that were not approved by Google (
i.e., Android forks). The EC considered that this restricted competition as it deprived consumers of alternative versions of OS which were not controlled by Google. The practice also strengthened Google's position in general search, as competing general services could be exclusively preinstalled and set as default on such Android forks, so they represented a viable distribution channel for Google's rivals.
The General Court confirmed the EC's reasoning stating that AFAs limited Android forks' access to the market.
The General Court clarified that to establish a restriction of competition the extent of competitive pressure or credibility of threat from Android fork is irrelevant. It suffices to establish (as the EC had) that Android forks would be a competitor on the market for licensable OS.
