Google Has Been Paying Wireless Carriers Billions To Not Develop Competing App Stores

from the not-so-innovative-I-guess dept

To be clear, wireless carrier app stores have always kind of sucked. Verizon's efforts to create its own app store were shut down in 2012, after underwhelming consumers for years. At the time, the narrative was that Verizon just didn't find it worth the trouble in the face of Google domination and innovation. And while that's still largely true (wireless carriers are utterly unfamiliar with competition and therefore historically suck at innovation and adaptation), it turns out there was another reason.

Namely, that Google was paying Verizon and other major wireless companies a big chunk of money to not compete with the Android marketplace. And they were paying smartphone manufacturers to ship devices without competing app stores installed. Both nuggets were buried in a freshly unredacted copy of Epic's antitrust complaint (pdf) against Google, first spotted by Jeremy Owens:

This agreement to start paying wireless carriers 20-25% of app sales was occurring right around the time that Google brass was visibly starting to wimp out on consumer-centric issues like net neutrality. That involved working closely with Verizon to push the FCC toward flimsy, loophole-filled, "compromise" 2010 net neutrality rules that excluded wireless entirely. Verizon proceeded to then successfully sue the FCC to have those repealed anyway, leading to better rules in 2015 that were also dismantled a few years, later, albeit thanks to lobbying, not the courtroom.

Google's shift from hugely innovative disruptor to entrenched, elbow-swinging turf protector has been a fairly ugly and historically unsurprising transition. You can clearly see the line in the sand somewhere around 2010 to throw away many of the guiding principles that made them successful and popular. There was another executive leadership pivot sometime around 2016 that brought with it increased timidity at the company (see: the company's abrupt decision to largely give up on expanding Google Fiber and many other exciting moonshot projects). Then, more recently there's the whole AI ethics scandals, which speaks for itself.

To be clear Google still does a lot of interesting and popular stuff, but it's pretty damn clear that the ethics and bravery that guided the company originally were obliterated some time back.

I have to think that revelations Google was paying wireless carriers and smartphone manufacturers to not compete with it will likely fuel several different antitrust inquiries and court cases. Maybe wireless carriers would have always failed to develop compelling app stores of their own thanks to innate incompetence, but it's harder than ever for that to happen when Google is paying you billions of dollars to not even try. And then, should those competing app stores succeed, paying handset makers not to carry them anyway, even if they happen to become popular.

As a little side note, the fact Google has been paying wireless carriers billions of dollars to do nothing kind of puts an additional dent in FCC Commissioner's ongoing, dumb claim that "big tech" gets a "free ride" on telecom networks. Getting paid to do nothing is the exact kind of thing AT&T has been pushing for since 2003 or so. It's the kind of stupid demand that started the net neutrality debate. Whether the payoffs violated the law is for antitrust lawyers to decide, but the fact Google repeatedly thought nothing about ignoring its original founding principles continues to speak pretty loudly either way.

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Filed Under: android, app stores, competition, fees, mobile app stores, mobile operators
Companies: google, verizon


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  1. icon
    Federico (profile), 20 Aug 2021 @ 7:07am

    European Commission and Google Android case

    See also https://ec.europa.eu/commission/presscorner/detail/en/IP_18_4581 :

    In particular, Google:

    has required manufacturers to pre-install the Google Search app and browser app (Chrome), as a condition for licensing Google's app store (the Play Store);
    made payments to certain large manufacturers and mobile network operators on condition that they exclusively pre-installed the Google Search app on their devices; and
    has prevented manufacturers wishing to pre-install Google apps from selling even a single smart mobile device running on alternative versions of Android that were not approved by Google (so-called "Android forks").

    https://ec.europa.eu/competition/antitrust/cases/dec_docs/40099/40099_9993_3.pdf :

    Fifth, hardware manufacturers must place on the device's default home screen the icons which give access to the Google Search app, the Play Store and a folder labelled "Google" ("Google folder") that provides access to a collection of icons for a number of mandatory Google apps. Any other pre-installed Google apps should be placed no more than one level below the home screen.
    Sixth, hardware manufacturers are required to "set Google Search as the default search provider for all Web search access points, [...]".

    reply to this | link to this | view in thread ]

  2. identicon
    Pixelation, 20 Aug 2021 @ 7:30am

    Uh oh

    Hey Karl, remember that Mike is a Google shill and you could get fired for writing articles like this. Toe the line my man. ;)

    reply to this | link to this | view in thread ]

  3. identicon
    Anonymous Coward, 20 Aug 2021 @ 7:33am

    Have you seen carrier exclusive app stores?

    They utterly suck and given the openness of android as a platform they can do so easily.

    reply to this | link to this | view in thread ]

  4. identicon
    anon, 20 Aug 2021 @ 8:16am

    Have you ever used an AT&T smartphone

    There's so many crap AT&T apps installed on AT&T Smartphones, by AT&T, that can't be uninstalled, that I can't image the absolute nuclear-cluster-fuck that their app store might be.

    reply to this | link to this | view in thread ]

  5. identicon
    Glenn, 20 Aug 2021 @ 8:58am

    Looks like the carriers et al are getting free rides for not doing something they suck at and most people wouldn't be interested in anyway. Did I say "free ride"? I meant to say "making big bucks" (for doing nothing).

    I'm not really seeing a problem with having a simple, basic business arrangement that deprives no one of anything worthwhile.

    reply to this | link to this | view in thread ]

  6. identicon
    Anonymous Coward, 20 Aug 2021 @ 8:58am

    Re: Have you ever used an AT&T smartphone

    Verizon does it too...

    reply to this | link to this | view in thread ]

  7. identicon
    Anonymous Coward, 20 Aug 2021 @ 8:59am

    Do no evil!

    reply to this | link to this | view in thread ]

  8. identicon
    Anonymous Coward, 20 Aug 2021 @ 9:17am

    Re: Re: Have you ever used an AT&T smartphone

    Sprint did it too, and I suspect T-Mobile did as well.

    reply to this | link to this | view in thread ]

  9. identicon
    Anonymous Coward, 20 Aug 2021 @ 9:58am

    And then, should those competing app stores succeed, paying handset makers not to carry them anyway, even if they happen to become popular.

    Sounds very similar to the IE vs Netscape stunt Microsoft pulled with OEMs. The very stunt that (along with other things) ended up with them being found guilty of Antitrust violations.

    reply to this | link to this | view in thread ]

  10. identicon
    Anonymous Coward, 20 Aug 2021 @ 10:12am

    This is like payola all over again but with different actor giving and receiving the moola.

    For the younger crowd: https://en.wikipedia.org/wiki/Payola

    Here, Google is the music "industry" and the carriers are the radio stations (and others)...

    reply to this | link to this | view in thread ]

  11. identicon
    Scote, 20 Aug 2021 @ 11:01am

    Re: Have you ever used an AT&T smartphone

    So much this. I'm OK with Google heading off the crApp stores that would have been created by the cell carriers.

    Remember what the carriers wanted phones to be like? They wanted to sell you ring tones for $4 each. And the actually made phone manufacturers remove the cumulative call timer feature that let you keep track of how many of your monthly minutes you'd used. The kind of apps they'd want on my phone via their app store would be terrible, and they'd want to lock me into their app store, finding a way to keep me from getting the apps I wanted, and to charge me for ones I don't.

    The cell carriers are not some benevolent force for good - not even as "competitors" to Google.

    reply to this | link to this | view in thread ]

  12. icon
    ECA (profile), 20 Aug 2021 @ 12:33pm

    Re: Have you ever used an AT&T smartphone

    Samsung loves to have a Smasung loadup and then google gets there onthe same phone and the Phone is FULL. 16gig of crap from both sides.
    But if you Stop the samsung loadup, its just Android, and thats Fairly clean install.

    reply to this | link to this | view in thread ]

  13. identicon
    Anonymous Coward, 20 Aug 2021 @ 2:37pm

    But I can switch to an iPhone, so Google’s behavior poses no anti-competitive issue whatsoever. Just like how Bing and DuckDuckGo cause all the issues with Google’s size and power to instantly evaporate.

    /s

    reply to this | link to this | view in thread ]

  14. identicon
    Anonymous Coward, 20 Aug 2021 @ 6:14pm

    We need Linux phones, ASAP!

    reply to this | link to this | view in thread ]

  15. identicon
    Anonymous Coward, 20 Aug 2021 @ 6:53pm

    Re:

    lots of options there, up to you

    reply to this | link to this | view in thread ]

  16. icon
    sumgai (profile), 20 Aug 2021 @ 7:44pm

    eyhe

    What I find a little incredulous is that every year, everyone has to file tax returns, and if they're a public corporation, they also have to file a 10K with the SEC. From regular scrutiny of the "big boys" in the telecom sector, I'd like to think that someone should've seen a line item on the order of "Income from Google" . Or at the very least, a line item that made no sense at all, and no one could (or would!) explain what it meant - that should've raised a few eyebrows at some time in the past several years.

    reply to this | link to this | view in thread ]

  17. identicon
    Anonymous Coward, 20 Aug 2021 @ 9:19pm

    Re: Re: Have you ever used an AT&T smartphone

    tried to do that with my Galaxy A50 after upgrading to Android 11, i installed the Google Clock app and disabled (from an ADB shell) the built-in Samsung Clock app.

    i discovered that the phone started to drain battery like crazy and the screen was not turning off at all...

    Even if the display was all-black, since i enabled 'show touches' under the developer settings i could see that the display was actually working and was drawing markers for every little touch it could detect... that clued me in on the fact that the display was not turning off at all.

    For a few months I didn't quite know why it was behaving like that and draining the battery, since after upgrading to Android 11 i had replaced and disabled quite a few stock Samsung apps, but then i decided to look into it and discovered that Samsung designed their piece of shit logic for the display to depend on the Samsung Clock app.

    If the Samsung Clock app is disabled then it won't show the clock on the lockscreen (meh...didn't need it) BUT it will also NOT turn off the display at all since it was waiting for their Clock app. (WTF moment)

    The result was that it is draining the battery to about 50% after just sitting unused on the desk for 3-4 hours.

    reply to this | link to this | view in thread ]

  18. icon
    ECA (profile), 21 Aug 2021 @ 11:19am

    Re: Re: Re: Have you ever used an AT&T smartphone

    its so much fun watching others play with tech and messing Everything up.

    reply to this | link to this | view in thread ]

  19. identicon
    Anonymous Coward, 21 Aug 2021 @ 8:25pm

    Re:

    Android phones run Linux.

    reply to this | link to this | view in thread ]

  20. identicon
    Anonymous Coward, 22 Aug 2021 @ 2:24am

    Re: Uh oh

    Might wanna check who's funding their Tech and COVID section.

    Google's not the only one in the room for a while now. ;)

    Which also explains why there's low-quality, unTechdirt-like garbage being mixed in recently.

    reply to this | link to this | view in thread ]

  21. icon
    tp (profile), 24 Aug 2021 @ 3:46am

    How do I subscribe to billions of money?

    I can also threaten google by creating my own app store and competing against google's play store. It's called meshpage. It shows 3d models and executable scripts for 3d modelling. Now that I have app store ready, I just need to subscribe to the billions of money designed to kill my appstore.

    So, where's my money?

    reply to this | link to this | view in thread ]

  22. identicon
    Talmyr, 1 Sep 2021 @ 1:59am

    Re: Re:

    Whoooooosh!

    reply to this | link to this | view in thread ]

  23. identicon
    Talmyr, 1 Sep 2021 @ 2:00am

    Re: How do I subscribe to billions of money?

    See, you an be funny when you aren't trolling.

    reply to this | link to this | view in thread ]


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