"What is the Standard for Determining Illegal Behavior?
"The United States and European Union have, at least since the Reagan Administration, differed on this point: the U.S. is primarily concerned with consumer welfare, and the primary proxy is price. In other words, as long as prices do not increase — or even better, decrease — there is, by definition, no illegal behavior.
"The European Commission, on the other hand, is explicitly focused on competition: monopolistic behavior is presumed to be illegal if it restricts competitors which, in the theoretical long run, hurts consumers by restricting innovation."
I always had a hard time with that notion. It feels too ripe for abuse to me.
Google is dumping prices for all products and by that it kills competition unfairly - google maps as a standalone product would not survive because it does not generate ad revenues and it’s free to use. Gmail was also unsustainable for really long time because it was free and without ads. So it’s not as simple as you are saying.
The EU has competition law that places restrictions on how you can behave as soon as you have a 40% share of a given market.
Under EU competition law, once you have that 40% market share in one area, you may not use that market share as a weapon against competitors in other areas.
I think Google has 90%+ market share in all of those, at least in Europe.
That's kind of a weird statement, of course they are dominant / monopolistic on Android, just like Apple has a monopoly on iOS.
As for the latter being a thing but Apple not getting into trouble for their iOS App Store monopoly, I guess that is because Apple isn't using that "dominant position" to prop up a dominant position in another market (like Google is propping up their dominance in search engines).
Or maybe the overall consumer harm is considered to be much smaller, considering that Android has 80% smart mobile device market share in Europe (according to the EC press release), and iOS has a much smaller share.
I'm not sure if this is an outcome I want.
The intent is different too.
The EU is looking to protect a healthy level of competition in the marketplace, while we in the US have moved the goalposts to "can you prove this particular monopoly is doing consumers harm"?
America's "hands off" approach to regulation has allowed the country to produce companies that much of the world envies.
That is not what is illegal.
However, once you hit a certain market share (40% in the EU) you may no longer use that market share as a weapon against competitors in other areas.
is unlikely to be different from "free" in the eyes of regulators. But it does clarify what particularly is the concern the regulators are interested in -- how much of discount is implied in the servicde-bundle placement.
Meanwhile, if they offer to pay too much, OEMs can replace the app store and the other apps with cheaper alternatives, and just profit off the high incentives to load Chrome and Search, and Google loses it's grip on the Play Store's market.
The license fee adds a lot of incentive for OEMs to consider alternative app markets: Imagine if Samsung offered developers an app market with a 10% cut instead of Play's 30% cut. Would that move the needle on getting developers on board with a competing app market? Sure, Samsung wouldn't pull as much in on it, but they'd be avoiding the license fee to pay Google too. Secondary effect of this that will also spur on competition another way: If this happens, Google might consider dropping it's own rates to compete.
On both sides of this kinda split-bundle arrangement, Google will need to maintain a competitive offer or else competitors will swoop in, whereas before, OEMs didn't have any choice in the matter because it was all or nothing.
Bear in mind, Google has to pay Apple and Firefox billions to keep Google as the default search, but Android OEMs were being forced to keep search as the default for free. So yeah, the Play Store will have a license fee, but Google now has to pay up to hold onto search dominance.
They want "The next Google" to be a European company.
Who is actually the beneficiary of this action? It seems pretty dubious that it helps customers, after all, the whole thing stems from the fact that the customers want the Play Store.
It says that they would offer would be financial incentives for partnering with chrome and google. Is it just gonna be like "access to Google Play is $10, but if you bundle our services, we'll give you $10!"
Or is the effect that it increases the leverage of other handset makers to essentially extract rents of digital real estate from Google like Apple does?