Friday, April 22, 2016

Help Without Borders: How the Google Android Case Threatens to Derail the Limited Scope of the Obligation to Assist Competitors

Konstantinos Stylianou, University of Leeds - School of Law has a new paper on Help Without Borders: How the Google Android Case Threatens to Derail the Limited Scope of the Obligation to Assist Competitors.

Abstract: The Google Android investigation concerns the conditions under which Google makes certain of its applications (“Google Apps”, e.g. Play, Maps etc.) and the Android operating system available to manufacturers of mobile devices and mobile operating systems (OEMs). Some of those terms and conditions place restrictions around Android and Google Apps raising complaints among market players and competition authorities. One should not be too quick to dismiss these concerns; Google possesses a prominent position in the market and its practices, no matter how innocuous when performed by smaller firms, can have far-reaching reverberations when performed by Google. But at the same time, appreciating Google's prominent position also means not neglecting Google’s coopetitive relationship with its partners/competitors on account of the development and distribution of Android and Google Apps, and Google’s own interests as another competitor in the market. To ask that Google raise all restrictions as desired by its competitors would upset this balance, and competition law has traditionally been wary of prescribing market interactions as long as the competitive process remains intact. This article indeed suggests that, properly conceived, Google's restrictions not only serve its right to compete on the merits, which always serves as a backstop to what can be recognised as an offense or how far a remedy can do, but they do so in the context of Google already assisting competitors succeed in the market.

To understand and evaluate the central point here the article proceeds in two steps. First, it establishes what type of competition law offenses Google might be engaging in. The language of the European Commission and the ensuing legal literature suggest tying/bundling arrangements among Google Apps, and between Google Apps and Android, and also a requirement that OEMs that want to adopt Google Apps do not develop forked versions of Android. A different approach is suggested here, according to which the conditions that govern the availability of Google Apps should be treated as a potential refusal to supply (with Google Apps serving as the “golden nugget” to which OEMs want access), the bundling of Google Apps together should be treated as a what can be described as coopetitive bundling, due to the multi-layered relationship Google maintains with rival application developers, and for the same reason the exclusive dealing arrangement as coopetitive exclusive dealing arrangement.

Once the proper legal bases are found, one can then look for their limits. In that direction, it is argued that mandating access to Google Apps and unbundling the applications suite would amount to the creation of a positive obligation for Google to assist competitors beyond what the (already limited) refusal to supply doctrine envisages, and beyond the residual freedom to compete on the merits the tying doctrine allows, especially when the tying arrangement is characterised by the novel element of generating benefits for competitors as, arguably, in the case at hand.

This note does not deny the possibility of Google's wrongdoing. Nor does it deny that Google’s conduct is inconveniencing competitors. It does insist however on proper legal tests, which set boundaries that respect the fundamental principle of competition law that firms are there to compete, not to help each other beyond what they wish for themselves.

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