Out of the box: illegal tying and Google’s suite of apps for the Android OS

Abstract:

This paper analyses Google’s practice of bundling certain smartphone applications together in a single suite that smartphone manufacturers pre-install on their devices, which is currently under antitrust scrutiny in multiple jurisdictions. After describing the low burden of proof faced by the European Commission under European tying law, which diverges from modern economic thinking, this paper shows that there is little evidence that the all-or-nothing clause forecloses competitors.

There are also a range of procompetitive efficiencies and justifications that will be unduly punished if the European Commission finds that Google has violated Article 102 of the Treaty on the Functioning of the European Union. In particular, the paper analyses the oft-quoted “out-of-the-box” functionality that Google’s bundle of apps provides users and developers, which will be ignored by a traditional European tying analysis.