Why China Stuck Its Foot in Android’s Door

China’s antitrust authorities have approved Google’s purchase of Motorola Mobility, on the condition that the Android operating system remain open source and its code be made freely available to original equipment manufacturers (OEMs).

Android devices had nearly 74 percent of the Chinese market in Q4, 2011, and that — together with Google’s large war chest, technical expertise and the high market barriers to entry into the mobile market — means Android is in a dominant position, China’s Commerce Department said.

“Our stance since we agreed to acquire Motorola has not changed, and we look forward to closing the deal,” Google spokesperson Niki Fenwick told LinuxInsider.

“Android is clearly a key platform for many Chinese manufacturers of devices, and the vertical integration of software and hardware between Google and Motorola appears to have spooked the Chinese,” Al Hilwa, a program director at IDC, said.

Terms of Android Endearment

The agreement will last for five years. Google will have to file a report with China’s Commerce Department every six months. After the five years are up, the department will reassess the situation.

Google must ensure that current and future versions of the Android open software stack are available under a free and open software license consistent with current business practices, China’s Commerce Department said.

However, apps on the platform and related services can be closed source.

Sharing Out the Android Pie

China requires that Google offers Android in a non-discriminatory manner to OEMs who have agreed not to differentiate the platform or create derivatives. Google also has to comply with the existing fair, reasonable and non-discriminatory (FRAND) rules governing Motorola Mobility.

FRAND is the touchstone of much litigation between companies in the mobile market, such as Apple, Motorola Mobility and Samsung.

If market conditions or the state of competition in the market change, Google can apply to modify or rescind the requirements for free and open licensing and for offering the Android platform without discrimination to OEMs. Further, these two requirements will no longer apply if Google in essence doesn’t own Motorola Mobility.

“I’m not sure if Google had to take anything off the table to reach this agreement,” Michael Morgan, a senior analyst at ABI Research, told LinuxInsider.

Why Focus on Openness?

Android has always been open source, and “I don’t think there’s much danger of Google taking Android to a single hardware OEM or leveraging it in any way other than through open source and free licensing in the short term,” IDC’s Hilwa told LinuxInsider.

“You don’t compete with Apple with another fully integrated single device; you out-flank them with a diametrically opposed strategy, which is what Google succeeded in doing with Android,” Hilwa continued.

On the other hand, “think about the language and messaging Google has put around the Motorola [Mobility] acquisition,” ABI’s Morgan pointed out. “It’s a separate business unit and will be run as a separate business.”

If Google gave Motorola Mobility preferential or sole access to Android source code and ran for-fee services on the platform, it “will have hardware all the way up to the Internet, and that will be a lot of power for one company to have, seeing that Google pretty much owns the Internet and Android is strong in the mobile market,” Morgan said.

Where’s Android Going?

“Keeping it open should help improve the amount of features and stuff that are added,” ABI’s Morgan said. “There are Chinese versions of Android out there, and what they and Amazon have done is just tweak Android; the core kernel remains the same.”

Being open “does not mean being unchanged,” IDC’s Hilwa asserted. “I expect Android to evolve vigorously over the next five years.”

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