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Why an antitrust case against Google’s Android is not a slam dunk

Pras Subramanian


People visit an Android stand at the Mobile World Congress in Barcelona
People visit an Android stand at the Mobile World Congress in Barcelona

The Volkswagen emissions scandal may have dominated the headlines this week, but there's another company in possible legal trouble as well. Bloomberg is reporting U.S. antitrust officials are planning to investigate Google’s (GOOGL) Android mobile operating system, looking into whether the company stifled competitors' access to Android. Both the FTC and Google have declined to comment.

The FTC has already investigated Google’s search business, but now it’s targeting mobile - and this could be a big deal. "Obviously [it could be] if this if this turns out to be a fully developed investigation, [the government] really wants to check out exactly how Google bundles different products into its Android operating system,” Yahoo Finance’s Mike Santoli says in the attached video “The thing this is really going to hinge on is does Google, through Android, have enough market power to make it almost required for users to utilize and therefore take all these other products they may or may not want.”

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While it may look like an investigation that is similar to the anti-trust probe Microsoft (MSFT) faced many years ago, Santoli notes Google isn’t in the same league. “Now Google's market share is big in mobile operating systems, but it's not necessarily as dominant, it’s under 60%,” he says. “Clearly Apple's (AAPL) been gaining market share, Apple has an alternative software, as do other manufacturers, so it's kind of interesting how maybe the regulators have to assimilate that issue.”

Another big differentiator in this case is the difficulty in seeing how much Google profits from its behavior with Android. “It’s hard to tease out exactly the profit streams that come out of all those other apps and products that Google bundles in maps,” Santoli points out. “It may not be that big a factor in terms of Google's overall finances, but it's very hard to know.”

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