Since Android was first released, many of us have wondered how open it really is. Last week, we learned more about Google’s (GOOG) tight control over Android through documents released as part of an European antitrust investigation.
The story was first reported by the Wall Street Journal, based on an analysis by Harvard professor Ben Edelman. (The WSJ said that Google declined to comment). The meat of the revelation were copies of the 2011-2012 “Mobile Application Distribution Agreement” (MADA) that was signed by Android licensees Samsung (OTC:SSNLF) and HTC(OTC:HTCCY). The agreements were exhibits in the Google-Oracle (ORCL) (née Sun Microsystems) Java copyright lawsuit in the Federal District of Northern California.
Ties That Bind
Rolfe Winkler of the WSJ summarized the (MADA) agreements as follows:
The Samsung and HTC agreements specify a dozen Google applications that must be “preinstalled” on the devices, that Google Search be set as the default search provider, and that Search and the Play Store appear “immediately adjacent” to the home screen, while other Google apps appear no more than one screen swipe away.
The terms put rival mobile apps, like AOL Inc.’s MapQuest and Microsoft Corp.’s Bing search, at a disadvantage on most Android devices. Mr. Edelman, who is a paid consultant for Microsoft, said the terms “help Google expand into areas where competition could otherwise occur.”
Google has successfully promoted its own apps on Android. Four of the top 10 most-used apps on Android smartphones in the U.S. during December were Google’s, according to comScore. On Apple’s iPhone, only one Google app—YouTube—was among the top 10.
Calling Edelman a Microsoft consultant seems like a red herring. More relevant is that he embarrassed Google by noting that it tracked user browsing even when users disabled it. Edelman seems an equal opportunity Internet activist, having spent his entire adult life at Harvard (earning an AB, AM, JD, and PhD in econ before becoming an assistant and associate professor at Harvard Business School).
In his own analysis, Edelman shows how Google’s activities constitute tying:
If a phone manufacturer wants to offer desired Google functions without close substitutes, the MADA provides that the manufacturer must install all other Google apps that Google specifies, including the defaults and placements that Google specifies. These requirements are properly understood as a tie: A manufacturer may want YouTube only, but Google makes the manufacturer accept Google Search, Google Maps, Google Network Location Provider, and more. Then a vendor with offerings only in some sectors—perhaps only a maps tool, but no video service—cannot replace Google’s full suite of services.
I have repeatedly flagged Google using its various popular and dominant services to compel use of other services. For example, in 2009-2010, to obtain image advertisements in AdWords campaigns, an advertiser had to join Google Affiliate Network. Since the rollout of Google+, a publisher seeking top algorithmic search traffic de facto must participate in Google’s social network. In this light, numerous Google practices entail important elements of tying:
|If a wants||Then it must accept|
|If a consumer wants to use Google Search||Google Finance, Images, Maps, News, Products, Shopping, YouTube, and more|
|If a mobile carrier wants to preinstallYouTube for Android||Google Search, Google Maps (even if a competitor is willing to pay to be default)|
|If an advertiser wants to advertise on anyAdWords Search Network Partner||All AdWords Search Network sites (in whatever proportion Google specifies)|
|If an advertiser wants to advertise onGoogle Search as viewed on computers||Tablet placements and, with limited restrictions, smartphone placements|
|If an advertiser wants image ads||Google Affiliate Network(historic)|
|If an advertiser wants a logo in search ads||Google Checkout(historic)|
|If a video producer wants preferred video indexing||YouTube hosting|
|If a web site publisher wants preferred search indexing||Google Plus participation|
Technically Open, Commercially Not
From a practical standpoint, phone makers have no choice but to comply with Google’s terms (with the exception of China’s domestic market, where Google’s services are blocked). As OSS IP maven Florian Muellerwrote:
Technically you can take the free and open parts of Android (in terms of the amount of code, that’s probably the vast majority, though the share of closed, tightly-controlled components appears to be on the rise) and build a device without signing any individual license agreement with Google, and some have indeed done so. If that is so, why did Samsung and HTC sign those agreements that have now come to light? For commercial reasons.
If you want your Android device to sell, you normally want to be able to call it an Android device. To do that, you need a trademark license from Google. Open source licenses cover software copyright, they may come with patent provisions, but licenses like the GPL or ASL (Apache) don’t involve trademarks.
The trademark — the little green robot, for example — is commercially key. In order to get it, you must meet thecompatibility criteria Google defines and enforces, which are mostly about protecting Google’s business interests: the apps linked to its services must be included. And those apps are subject to closed-source, commercial licensing terms. That’s what the MADA, the document Samsung and HTC and many others signed, is about.
Even if you decided that the trademark isn’t important to you, you would want at least some of the apps subject to the MADA. What’s a mobile operating system nowadays without an app store? Or without a maps/navigation component? Google gives OEMs an all-or-nothing choice: you accept their terms all the way, or you don’t get any of those commercially important components. And if you take them, then you must ensure that the users of your devices will find Google services as default choices for everything: search, mail, maps/navigation, etc.
This “free” software comes at a price. Even if Google doesn’t charge royalties to use its applications, the London Guardian estimated last month that it costs $40k-$75k to test a new handset for compliance with Google’s standards and thus be allowed to ship Google’s applications.
Google Isn’t Open About Not Being Open
Most troubling for me has been — since the beginning of Android — thegap between Google’s rhetoric of openness and the reality; for example, see “Open source without open governance” (June 2008), “Perhaps someday Android will be open” (July 2008), “Sharing in faux openness” (October 2009), “Google’s half-full glass of openness (January 2010), “Andy wants you to buy his openness (June 2010) “Semi-open Android getting more closed” (October 2013).
While these agreements have been in place for at least three years, Edelman notes that Motorola redacted the most important provisions of the MADA when it disclosed excerpts in a 2011 SEC filing. Google’s lack of transparency about its non-openness helps it be more successfully non-open:
MADA secrecy advances Google’s strategic objectives. By keeping MADA restrictions confidential and little-known, Google can suppress the competitive response. If users, app developers, and the concerned public knew about MADA restrictions, they would criticize the tension between the restrictions and Google’s promise that Android is “open” and “open source.” Moreover, if MADA restrictions were widely known, regulators would be more likely to reject Google’s arguments that Android’s “openness” should reduce or eliminate regulatory scrutiny of Google’s mobile practices. In contrast, by keeping the restrictions secret, Google avoids such scrutiny and is better able to continue to advance its strategic interests through tying, compulsory installation, and defaults.
Relatedly, MADA secrecy helps prevent standard market forces from disciplining Google’s restriction. Suppose consumers understood that Google uses tying and full-line-forcing to prevent manufacturers from offering phones with alternative apps, which could drive down phone prices. Then consumers would be angry and would likely make their complaints known both to regulators and to phone manufacturers. Instead, Google makes the ubiquitous presence of Google apps and the virtual absence of competitors look like a market outcome, falsely suggesting that no one actually wants to have or distribute competing apps.
With some irony, the WSJ article quoted Google’s former CEO:
“One of the greatest benefits of Android is that it fosters competition at every level of the mobile market—including among application developers,” Google Executive Chairman Eric Schmidt wrote to then-U.S. Senator Herb Kohl in 2011.
Peeling Back the Layers of Openwashing
While the most specific and conclusive, this latest revelation is not the only evidence that Android is more openwashing than open source.
For example, in October Ron Amadeo of Ars Technica listed all the cases where “open source” Android once came with a key application available in open source, but then Google orphaned the open source app when it brought out a fully-featured closed-source replacement. This includes the Search, Music, Calendar, Keyboard, Camera and Messaging apps.
At the same time, Google (with great success) sought to convince app developers to use the Google Play APIs rather than the official Android APIs — thus making these apps incompatible with devices that use only the open source part of Android (e.g. Amazon’s Kindle). If you want to use apps from the Google app store, you have to use the Google APIs.
Finally, there’s the matter of the Open Handset Alliance, the organization nominally leading Android development. Amadeo makes clear that OHA is more like the Microsoft Developer Network than the Eclipse Foundation (emphasis in original):
While it might not be an official requirement, being granted a Google apps license will go a whole lot easier if you join the Open Handset Alliance. The OHA is a group of companies committed to Android—Google’s Android—and members are contractually prohibited from building non-Google approved devices. That’s right, joining the OHA requires a company to sign its life away and promise to not build a device that runs a competing Android fork.
Google: Partly Open and Opening Parts
In the early 2000s, open source was a paradox. When I began researching my second open source article (which I used as a job talk in December 2001 and was published in 2003), it was not clear how firms could make money from something nominally open. Based on a study of Apple, IBM and Sun, I concluded that firms made money off of openness with strategies that were open in one of two ways: they opened parts (leaving other parts close) or they were partly open (granting some rights, but not enough to enable competitors).
Google is clearly doing both. Amadeo emphasizes that with Android, Google is only opening parts — leaving key components under tight control. Meanwhile, the latest news points to Google being only partly open: rights to use the “open source” (actually, a mixed-source) system depend on complying with a series of Google restrictions.
In 2011, mobile analyst Liz Laffan studied the openness of eight mobile-related open source communities. Building on a 2008 study I did with Siobhan O’Mahony, she developed a 13-factor openness score for firm controlled open source communities. In her report (summarized in a 2012 journal article) Laffan assigned scores from 0-100% open. Android was lowest at 23%, and in fact the only project less than 50%. At the other extreme, Linux was 71% and Eclipse (designed to be open from the start) was 84%.
Conclusion: Real World Android is a Proprietary Platform
In the 1980s and 1990s, Microsoft won commercial success by widely licensing its PC operating system to all comers. However, after the initial licenses (with its launch customer IBM), Microsoft largely dictated the terms of these licenses.
When people buy an Android phone, they are not buying the Android Open Source Project but (as Amadeo makes clear) the Google Play Platform. This platform — call it Real World Android — has the following characteristics
- Like Apple’s (AAPL) OS X (or IBM’s WebKit), it combines open source and proprietary elements.
- Like Windows, it is licensed to a wide range of hardware manufacturers.
- Like both OS X and Windows, much of the value comes from bundling a wide range of proprietary, closed-source applications
In short, Real World Android is a proprietary platform: proprietary in that it is a mixture of open source and proprietary elements, but the complete platform (including application functionality and access to the Android app ecosystem) requires licensing proprietary technologies under a restrictive proprietary contract. (For a true open source system, the open source license would be enough).
A few market experiments (notably Kindle and the Chinese market) have been made using the Android open source project (which Amadeo dubs AOSP). For the remainder, as Florian notes, commercial success requires agreeing to Google’s terms to use its proprietary platform. If it was ever accurate to refer to Android as an open source platform, it’s clearly no longer true today.
Yes, by using an ad-supported (two-sided market) approach Google doesn’t have to charge royalties, but that doesn’t make it free (as in speech or as in beer). With 42% of the US mobile ad market — and Android accounting for the majority of US smartphones — Google makesbillions off of Android users. Google’s preloaded apps command choice real estate, and if Google didn’t control this real estate, handset makers could sell this real estate to the highest bidder.
So despite all the rhetoric, Google is just another tech company that wants to rule the world and make zillions for its founders and executives. It controls its technology to gain maximum advantage, and (like many firms nowadays) uses openwashing to render spotless its proprietary motivations. This shouldn’t be surprising. It won’t be a surprise for anyone who reviews the how Android evolved (and the strategy emerged) over the first five years.