More to the Story About Mobile Competition
Claire Cain Miller’s New York Times piece published yesterday highlights the rapidly changing mobile app market and notes that mobile concerns about Google’s dominance were not addressed in the FTC’s disappointing settlement with Google.
Examples of big changes in just the past two years include the advent of Siri and an Apple maps feature on the iPhone. Google argues that the rapid changes and introduction of new apps bring in competitors that chip away at Google’s market power in mobile, but the facts about Google’s dominance undercut its version of the story.
According to the piece, “Google is even more dominant on mobile phones than on desktop computers. It has 96 percent of the world’s mobile search market. It collects 57 percent of mobile ad revenue in the United States, while Facebook, its nearest competitor, gets just 9 percent.” Not to mention that Google’s Android operating system dominates the mobile smartphone market with a 75% share, while Apple’s iOS carries just 15%.
And there are growing antitrust concerns about the legality of Google’s market dominance. Times reporter Steve Lohr wrote in November that Google could use its “free” Android software as a “sword and a shield to protect its dominance in search and grab an unfair advantage in new mobile services.” Lohr’s piece also highlights the lawsuit filed by Skyhook, an innovative location-based service for mobile phones. The suit alleges that Google interfered with Skyhook’s contracts with handset makers to keep the potential competitor from having the ability to offer Android users an alternative to Google for location-based services on Android phones.
Google also controls the payment, terms and services for all apps on its Android phones—forcing phone makers to use Google’s own payment collection service, Google Wallet. Dan Morrill, an Android manager, was quoted saying that Google uses “compatibility as a club to make [phone makers] do things we want.”
The FTC barely scratched the surface on mobile competition in search, and the European Commission has indicated it may add mobile as an area of concern where Google may be violating EU competition laws. Mobile is very much the next battleground when it comes to search and the next place where antitrust enforcement agencies worldwide are likely to challenge Google’s abuse of its dominance.