On July 18, 2018 the European Commission issued Google an unprecedented fine of €4.34 billion for allegedly illegal competitive practices. In its statement it said:
“ Our case is about three types of restrictions that Google has imposed on Android device manufacturers and network operators to ensure that traffic on Android devices goes to the Google search engine.”
Wait, isn’t Android open source? (Yes.) If so, can’t anybody download the code and run it on their device in any way they want? (Yes.) Then how could Google impose any restrictions? To answer this question, this article digs into the history of Android and into some interesting facts about Google business practices.
Back in the days of the dot-com boom, Google was “just” a search engine company. As the use of the Internet expanded, the smart people who run Google realized that more and more often the Internet is being searched from mobile devices. Google wanted to have a say in what search engine is used when users search the Internet. So in 2005 it bought Android — an operating system for mobile devices. Google kept Android open source, which means that anybody can download its source code, modify it as they see fit, and run it on any device.
Google became a development powerhouse behind Android, which propelled Android to become the #1 mobile operating system. According to the Android developer website:
“To maintain the quality of Android, Google has contributed full-time engineers, product managers, user interface designers, quality assurance testers, and all the other roles required to bring modern devices to market.”
Google carefully shepherds each release of Android. To begin a new release, it collects a bunch of “upstream projects” from various (mostly open-source) software. For example, the Linux kernel is one such upstream project. Once Google deems that the release is in good enough shape, it releases it to the public. From then on, the original equipment manufacturers (OEMs) — companies that make Android devices — can download Android, modify it as they see fit, install any applications they want and release it on a device to its customers. They may or may not release their changes back to the public. The Apache License 2.0, under which Android is distributed, does not obligate them to release the source code changes back into the public domain.
This situation does not give Google any leverage into what applications are used to search the Internet on mobile devices. For example, Verizon Wireless allegedly made Bing to be the default search engine on their Android devices. So how does Google get around the problem?
Google has found ways to “encourage” device manufacturers to pre-install flagship Google apps, including the search and Playstore on their devices. It is not surprising that most users buying an Android device actually want it to be equipped with Google’s awesome apps, like Maps and YouTube. So Google said to device manufacturers: If you want to pre-install any of our apps on your device, you have to install all of them as a bundle. If you want YouTube and Playstore, you also have to pre-install the search app, the browser, Google play services (which includes location services), etc.
To make this legally binding, Google makes the equipment manufacturers sign Mobile Application Distribution Agreements (MADA). A couple of them leaked to the Internet and can be accessed here and here. In addition to pre-installing the Google app bundle, MADA requires that Google apps are prominently featured on the device, so the user does not wander off using a competitor app by accident.
Not all device manufacturers want to or have to sign a MADA. For example, Amazon runs Android on Kindle, but uses none of the Google apps. It has its own version of the app store and other apps. But if a device manufacturer has signed a MADA, they better comply, and Google gets very angry if they don’t. For example, Motorola, that signed such an agreement and then wanted to ship its Android phone with Skyhook location services as opposed to Google’s, was forced by the latter to drop Skyhook.
A MADA is usually signed by all members of the Open Handset Alliance (OHA). OHA is loosely defined as a group of companies that are committed to Android. More specifically, it is a group of companies who sign MADA as well as another contract called the Anti-Fragmentation agreement. The Anti-Fragmentation agreement prevents them from making any devices that run an Android fork — a version of Android not approved by Google. That is why, none of the OHA members (which includes pretty much all major equipment makers) are allowed to make Kindle.
In summary, Google traded the ability to pre-install the coveted Google apps for restrictions on which apps are being pre-loaded on Android devices. The European Commission deemed this illegal. Google disagrees. The two will continue debating this question in courts.