EU Android follow-up

I wanted to post a quick update to my post earlier in the week about the EU’s Android antitrust action, to cover a specific topic in a bit more depth, namely the issue of the EU’s narrow definition of the relevant market. We also discussed the EU’s action against Google in depth this week on the Beyond Devices podcast.

As I said in that earlier piece:

The key to the EU’s finding that Google has dominant market share is a narrow definition of the relevant market here. Instead of treating mobile operating systems as a whole (or even smartphone operating systems) as the relevant market, the Commission has chosen to use “licensable operating systems” as the basis for its determination that Google has dominant market share.

The basis for the EU’s action is that it has to determine three things:

  • the definition of the market in which Android operates
  • a determination that Google’s share of that market is dominant
  • a finding that Google seeks to abuse that dominant position.

The definition of the market is therefore the first item on the list, and an important one. As I mentioned earlier in the week, the EU deliberately narrowed that definition so as to make Google seem more dominant. To illustrate this, the chart below shows Android’s market share as it is normally measured (as a share of smartphone sales) and as the EU would measure it (as a share of sales of devices based on licensed operating systems) in the five major European markets, as estimated by Kantar Worldpanel:Kantar Android market shareAs you can see, by eliminating iOS (and to a far smaller extent BlackBerry and other operating systems) from the equation, the EU quickly raises majority but not dominant market shares into market shares close to or above 90%, which is the figure it cites in its documents this week. In the UK, the difference between the two numbers is enormous – traditional market share is just over half, but share of licensable operating systems is 85%. There’s a certain logic to the EU’s actions given its focus on the relationship between Google and its OEMs, but it’s also very convenient for reaching the conclusion it wants to.