Competition Concerns in Multi-Sided Markets in Mobile Communication
The market for modern mobile phones (known as smartphones) is growing. Due to ongoing technical progress these devices offer more and more functionality. The possibility of an advanced use of the mobile internet is a key characteristic shared by most of t
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1 Introduction The market for modern mobile phones (known as smartphones1) is growing.2 Due to ongoing technical progress, these devices offer more and more functionality.3 The possibility of an advanced use of the mobile internet is a key characteristic shared by most of them. The applications and services of these devices are built upon mobile operating systems4 that allow the users to (partly) adjust the interface
1 Smartphones can be defined as “wireless phones with advanced Internet browsing and application capabilities” in contrast to “Basic phones [which] are used primarily for calls and text messaging” [and] “Feature phones [which] are wireless phones with limited Internet browsing and application capabilities” (Commission decision of 13 February 2012, Case No COMP/M.6381 - Google/Motorola Mobility, at para. 13, footnote 13). 2 Gartner (2014): Gartner Says Annual Smartphone Sales Surpassed Sales of Feature Phones for the First Time in 2013, Press Release, Egham, UK, 13 February 2014, available at: http://www. gartner.com/newsroom/id/2665715 (accessed 23 June 2014). 3 Hahn/Singer, Smartphone Wars, (2010) The Milken Institute Review, First Quarter 52, at 54. 4 “The mobile OS is a key part of the mobile software platform. An OS is ‘system software’ which controls the basic functions of an electronic device (mainly PCs, smartphones and tablets) and enables the user to make use of such an electronic device and run application software on it. Applications written for a given mobile OS will typically run on any mobile device using the same mobile OS, regardless of the manufacturer.” Commission Decision, Google/Motorola Mobility, supra note 1, at para. 22, citing Case COMP/C-3/37.792 – Microsoft, Commission decision of 24 March 2004, para. 37 and Case COMP/M.6281 – Microsoft/Skype, Commission decision of 7 October 2011, para. 38).
J.S. Frank (*) Faculty of Business Administration and Economics, Economic Policy, Philipps-Universita¨t Marburg, Germany e-mail: [email protected] G. Surblyte˙ (ed.), Competition on the Internet, MPI Studies on Intellectual Property and Competition Law 23, DOI 10.1007/978-3-642-55096-6_7, © Springer-Verlag Berlin Heidelberg 2015
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to their preferences (e.g. customization by downloading applications). Within the value chain different players can be distinguished that are influencing the overall user experience of mobile handsets, i.e. manufacturers of mobile devices (e.g. Nokia, Apple, Samsung), hardware suppliers (e.g. chip developers), network carriers (e.g. Deutsche Telekom, Telefo´nica, Vodafone, Verizon), providers of mobile operating systems (e.g. Apple, Google), providers of mobile application stores (e.g. Apple, Google, Amazon) as well as providers of applications that are sold via mobile application stores (various players in a variety of fields like games, navigation, information, communication). Thus, markets in mobile communication have a vertical structure.5 Players who are active in this field are mostly vertically integrated, which becom
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