ANTITRUST PROCEDURE Council Regulation (EC) 1/2003

1 EUROPEAN COMMISSION. Competition DG. CASE google Android (Only the English text is authentic). ANTITRUST PROCEDURE . Council Regulation (EC) 1/2003 . Article 7 Regulation (EC) 1/2003 . Date: 18/07/2018. This text is made available for information purposes only. A summary of this decision is published in all EU languages in the Official Journal of the European Union. Parts of this text have been edited to ensure that confidential information is not disclosed. Those parts are replaced by a non-confidential summary in square brackets or are shown as [ ]. EUROPEAN. COMMISSION. Brussels, C(2018) 4761 final COMMISSION DECISION. of relating to a proceeding under Article 102 of the Treaty on the Functioning of the European Union (the Treaty) and Article 54 of the EEA Agreement ( google Android). (Only the English text is authentic).

2 EN EN. TABLE OF CONTENTS. 1. Introduction .. 10. 2. Undertaking concerned .. 12. 3. 13. 4. google 's allegations that the Commission's investigation suffers from procedural errors .. 16. The Commission's alleged failure to grant access to the file in a timely and complete manner .. 17. The Commission's alleged failure to provide google with adequate access to minutes of meetings with third parties .. 18. The Commission's alleged failure to assess the evidence properly .. 18. The Commission's alleged obligation to discount FairSearch's submissions since at least November 19. 5. Products concerned by this Decision .. 19. Smart mobile devices .. 20. Operating systems for smart mobile devices .. 20. Apps .. 21. Smart mobile app stores .. 22. Application programming interfaces (APIs) .. 22. General search services.

3 24. Web browsers .. 26. 6. google 's activities in the mobile industry .. 27. Overview of google 's business 27. The shift to mobile and google 's response .. 29. google Search as default on smart mobile devices .. 31. The development of Android and the Android 32. The development of Android .. 32. I. Android Open Source Project .. 32. II. play Store .. 35. III. google play Services .. 36. Development of the Android ecosystem .. 38. google 's activities at the level of smart mobile devices .. 39. google 's agreements with members of the google Android ecosystem .. 40. Anti-Fragmentation Agreements .. 40. Mobile Application Distribution Agreements .. 45. Portfolio-based revenue share agreements .. 49. EN 2 EN. Portfolio-based revenue share agreements with OEMs .. 51. Portfolio-based revenue share agreements with MNOs.

4 53. 7. Relevant Product Markets .. 55. Principles .. 55. Application to this case .. 56. The licensing of smart mobile OSs .. 56. PC OSs and smart mobile OSs .. 56. Basic and feature phone OSs and smart mobile OSs .. 58. Smartphone OSs and tablet OSs .. 58. Licensable smart mobile OSs .. 59. Licensable smart mobile OSs and non-licensable smart mobile OSs .. 59. Android app stores .. 64. Other apps and app stores .. 65. Different google Android app stores .. 65. App stores for other Android devices and app stores for google Android devices .. 66. App stores for other licensable smart mobile OSs and Android app stores .. 67. App stores for non-licensable smart mobile OSs and Android app stores .. 72. General search services .. 74. The provision of general search services constitutes an economic activity.

5 75. General search services and other online services .. 76. General search services and content sites from a demand-side perspective .. 76. General search services and specialised search services from a demand-side 76. General search services and social networking sites from a demand-side perspective .. 78. General search services and other online services from a supply-side perspective .. 78. General search services on PCs and smart mobile devices .. 78. General search services on different smart mobile 79. All entry points on smart mobile devices .. 79. Non OS-specific mobile web browsers .. 80. PC web browsers and mobile web browsers .. 80. Other apps and mobile web browsers .. 81. Mobile web browsers for different smart mobile OSs .. 82. OS-specific mobile web browsers and non OS-specific mobile web browsers.

6 83. 8. Relevant Geographic Markets .. 85. Principles relating to geographic market definition .. 85. EN 3 EN. Application to this case .. 85. Licensing of smart mobile device operating systems .. 85. Android app stores .. 87. General search services .. 88. Non OS-specific mobile web browsers .. 89. 9. Dominance .. 89. Principles .. 89. Application to this case .. 91. Worldwide market (excluding China) for the licensing of smart mobile OSs .. 92. Market shares .. 92. Barriers to entry and 97. Lack of countervailing buyer power .. 102. Non-licensable smart mobile OSs .. 102. Users obtain smart mobile OSs as part of a wider bundle with a smart mobile device and take into account a range of factors other than the smart mobile OS when purchasing a smart mobile device .. 103. iOS exercises an insufficient indirect constraint on google 's dominant position in the worldwide (excluding China) market for licensable smart mobile OSs.

7 108. I. There are significant price differences between google Android and iOS devices 109. II. Users of google Android devices would face substantial costs when switching to iOS. devices .. 113. III. Users show a significant degree of loyalty to their existing smart mobile OS .. 117. IV. App developers are unlikely to stop developing for google Android and develop exclusively for iOS .. 122. BlackBerry OS exercises an insufficient indirect constraint on google 's dominant position in the worldwide (excluding China) market for licensable smart mobile OSs .. 124. The AOSP licence .. 124. Other google arguments on dominance in the market for licensable smart mobile OSs .. 127. Worldwide market (excluding China) for Android app stores .. 128. Market shares .. 128. Quantity and popularity of apps available on the play Store.

8 132. Automatic update functionalities of the play 135. google play Services .. 136. Barriers to entry and 138. Lack of countervailing buyer power .. 142. App stores for non-licensable smart mobile OSs .. 143. EN 4 EN. National markets for general search services .. 148. Market shares .. 149. Barriers to entry and 153. Infrequency of user multi-homing and existence of brand effects .. 158. Lack of countervailing buyer power .. 159. The argument that google 's general search services are offered free of charge .. 160. The argument that users in the EEA may use google 's general search service because of the perceived relevance of the results provided by that service .. 161. 10. Abuse of Dominant Position: General Principles .. 161. Principles .. 161. Application to this case .. 164. 11. Abuse of google 's dominant position: tying relating to its proprietary mobile apps.

9 164. Principles .. 164. Summary of the abusive conduct .. 166. Tying of the google Search app with the play Store .. 167. The play Store and the google Search app are distinct products .. 167. Dominance in the worldwide market (excluding China) for Android app stores .. 168. The play Store cannot be obtained without the google Search app .. 168. Restriction of competition .. 168. The tying of the google Search app with the play Store provides google with a significant competitive advantage that competing general search services providers cannot offset .. 169. I. The number of general searches via smart mobile devices has grown significantly 169. II. Pre-installation is an important channel for the distribution of general search services on smart mobile devices .. 169. III. It is impossible to uninstall the google Search app on GMS devices.

10 181. IV. Competing general search services cannot offset the competitive advantage that google ensures for itself through tying .. 181. V. google 's competitive advantage resulting from the tying and the inability of competing general search services to offset that advantage is consistent with the evolution of google 's shares of general search queries .. 191. VI. google 's other claims and the Commission's response .. 195. google 's conduct helps to maintain and strengthen its dominant position in each national market for general search services, increases barriers to entry, deters innovation and tends to harm, directly or indirectly, consumers .. 196. google 's claims regarding the need for the Commission to consider its conduct in the relevant economic and legal context .. 198. Tying of google Chrome with the play Store and the google Search app.