T-Mobile sale not the only telco worry for antitrust watchdogs

By Rob Cox
March 28, 2011

America’s antitrust and telecoms watchdogs have their hands full with AT&T’s proposed purchase of T-Mobile. So they may overlook what’s at stake in a seemingly esoteric spat between Google geeks and their Facebook cohorts. But the quarrel raises vexing questions about the search giant’s increasing dominance in the mobile handset market — and whether it can resist the temptation to abuse that power.

On its face, the kerfuffle is still something of a “he said, she said” among the engineering set. Google said it is making a “small change” to the way contacts from Facebook appear on its next-generation handset, the Nexus S. This modification essentially no longer allows customers to download their contacts from Facebook. The reason, Google insists, is that the Facebook data cannot be exported from the device, creating “a false sense of data portability.”

Of course, users of the phone and all those using Google’s Android operating system can still access Facebook on their devices even if they can’t synch contacts onto their gadgets. The concern among those outside the Googlepex is that this is the first sign of the search behemoth gradually creating barriers for Android customers to access Facebook and other websites it considers a threat. Both companies are battling for advertising dollars, users and talent.

Google’s surging dominance of mobile operating systems is what’s especially worrisome. Android-powered phones hold a 53 percent share of the U.S. consumer smartphone market, according to The NPD Group. And some Silicon Valley executives expect it to reach 80 percent in a few years.

Google’s motto is to avoid evilness. So the decision to block Facebook’s contacts on its new phones may simply be, as it says, a technology issue. Or it may be a shot across Facebook’s bow to remind the group led by Mark Zuckerberg — which itself has been accused of locking up user data — that openness is a two-way street.

But as Microsoft showed with the abuse of its position in the 1990s to bury rival Internet browser Netscape, it’s better to stop a monopoly early on than battle one fully unleashed. Trustbusters may want to be certain Google’s word is still its bond.

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