That's A Really Nice Suit

A nice little piece of litigation cropped up on the mobile news radar today - Skyhook, a WiFi/GPS location services provider, is suing Google for "forcing" certain Android device manufacturers (specifically Motorola and Samsung) to utilize Google Location Services instead of Skyhook on the DROID X and Galaxy S devices as their primary location services provider, respectively. If you're thinking "but Android is open source," stay tuned kids, I'll be explaining why that doesn't matter so much in this case.

Skyhook's complaint, filed in Massachusetts, makes 3 basic allegations:

Google knowingly induced Motorola to breach its contract with Skyhook; Google intentionally interfered with Skyhook's "advantageous business relations"; Google engaged in unfair and deceptive trade practices in the above and other actions which injured Skyhook.

And what is it Skyhook wants? Well, money. That and a permanent injunction against Google making it the device manufacturers' choice to use Skyhook instead of Google Location Services, should they be so inclined.

The latter, I can tell you right now, is simply not going to happen - and Skyhook (and their lawyers) are probably well-aware of this. But Skyhook would be wise to invest in some wheelbarrows if its assertion that there was a breach of contract with Motorola is true, as its allegations regarding Google's behavior don't sound all that farfetched. What exactly happened?

The Story

In a nutshell (and I am paraphrasing), Skyhook after "years" of negotiation, entered into a contract with Motorola to ship an Android phone (the DROID X) with Skyhook as its primary location services provider. As we all know, Android phones also come with Google Location Services (GLS) - which is used to integrate your location with Google Search, Buzz, Twitter, the Camera app, Navigation, etc. The GLS framework is inextricably part of the Android OS, but an alternative location service software can be used in its place if a device manufacturer chooses.

Google's Andy Rubin, upon finding this out, apparently called up Motorola's Sanjay Jha personally to request that the mobile phone producer reconsider its choice of Skyhook. Specifically, Google threatened to revoke the DROID X's Android compliance certification - removing its access to the Market and, potentially, other proprietary Google software and services.

Google gave Motorola two choices (really, three): put a startup disclaimer on the DROID X that made Skyhook look like a big-brother information gatherer and allow users to use GLS instead, or force Skyhook and GLS to run simultaneously (that is, side-by-side). Neither option appealed to Skyhook, to whom Motorola went to with these options. Skyhook refused to bargain and, in the end, the DROID X shipped with GLS as its primary location service provider.

A similar situation unfurled with the US-bound versions of the Samsung Galaxy S (which are Skyhook-enabled in Europe), though Skyhook does not allege a breach of contract with Samsung, merely the loss of expected royalties. So, back to the open source issue: how can Google remove a phone's access to the Market if Android is open source?

Sort Of Open Source

This is where things get a little shady. The Android operating system really is open source - you can remove, add, modify, turn off or on any feature or piece of the operating system at will as a developer, manufacturer, or person. But some of Google's Android applications and services are not part of the Android OS, and very much closed source. This includes the gateway to most Android apps: the Android Market. Why don't all those nice-looking Chinese Android phones have access to the Marketplace? Google won't license them.

In order for an Android device to receive access to the Market (and thus be a part of what Google calls "the Android ecosystem"), devices must pass a two-part compliance test conducted by Google. The first half is an objective software Compliance Test Suite (the "CTS"), which determines a device's general compatibility with Android. The latter portion of the test is an individual, human evaluation of the device in question - in which Google determines if a device meets the requirements of the Compliance Definition Document (the "CDD").

The DROID X received certification on both tests prior to Google's realization that Skyhook was going to ship as its primary location service. Google then alleged that Motorola was in violation of the CDD by using Skyhook, and later did the same to Samsung. Both manufacturers quickly caved to Google's demands.

Show Me The Money

While Google will respond with its own version of events, it seems pretty clear that the "don't be evil" mantra was violated in this case. Google needs the data generated from its GLS for advertisement targeting and search enhancements - if Skyhook took over, Google would have to be paying for (or simply not receiving) Android user location data. Such a consequence would be pretty undesirable for Google. But, that does not excuse Google from liability in what seems like a pretty clear-cut case of inducement to breach a contract.

Intentional inducement to breach a contract is unlawful, and while Skyhook would have to fight hard in court (they are a company of 32 employees with limited resources) to win at trial, a settlement is extremely likely to emerge before things reach that stage. Skyhook's demand for additional damages in expectations of royalties would be harder to prove, unless Skyhook could show they tangibly relied upon those royalties. Even without the royalties, Skyhook will likely be receiving a hefty sum from Google to keep quiet.

A deal may eventually emerge between the two (though this is sheer speculation) that gives Google equal possession of user data generated by Skyhook's services, if only for the sake of preventing additional litigation. Time will tell, and we'll be awaiting Google's response to Skyhook's complaint.

Source: BusinessInsider