Amazon has sold millions of Fire TV streaming devices in recent years, but its efforts to expand the Fire TV platform to smart TVs and cable set-top boxes have been slow-going. That's not by accident, according to industry insiders: They say Google has long prevented consumer electronics manufacturers from doing business with Amazon.

Any company that licenses Google's Android TV operating system for some of its smart TVs or even uses Android as a mobile operating system has to agree to terms that prevent it from also building devices using forked versions of Android like Amazon's Fire TV operating system, according to multiple sources. If a company were to break those terms, it could lose access to the Play Store and Google's apps for all of its devices. "They cannot do Android TV and Fire TV simultaneously," said a senior employee of a major TV manufacturer, who spoke with Protocol on the condition of anonymity because he wasn't authorized by his employer to discuss the subject.

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With these terms, Google has effectively built a huge firewall against competition in the living room: The search giant announced last year that it had struck deals with six out of 10 smart TV manufacturers and 140 cable TV operators across the globe. "It basically blocked Amazon," the senior employee said.

Regulators in multiple markets have in the past taken issue with Google using these kinds of deal terms to protect its mobile Android business, but their application in the smart TV space hasn't been previously reported. Google declined to comment on the subject. Amazon's Fire TV VP and GM Marc Whitten declined to talk about Google's policies during a recent interview, but went on to lay out Amazon's own approach toward engaging with manufacturing partners.

"We don't expect them to only use our services or our software," he said. "We think that partners should be able to pick the solutions that work for them, which may actually vary between lines of TVs, or different categories of devices and territories. I think that diversity of options is a really good thing."

Anti-fragmentation policies locking out competitors



At the center of Google's efforts to block Amazon's smart TV ambitions is the Android Compatibility Commitment — a confidential set of policies formerly known as the Anti-Fragmentation Agreement — that manufacturers of Android devices have to agree to in order to get access to Google's Play Store. Google has been developing Android as an open-source operating system, while at the same time keeping much tighter control of what device manufacturers can do if they want access to the Play Store as well as the company's suite of apps. For Android TV, Google's apps include a highly customized launcher, or home screen, optimized for big-screen environments, as well as a TV version of its Play Store.



Google policies are meant to set a baseline for compatible Android devices and guarantee that apps developed for one Android device also work on another. The company also gives developers some latitude, allowing them to build their own versions of Android based on the operating system's open source code, as long as they follow Google's compatibility requirements.

However, the Android Compatibility Commitment blocks manufacturers from building devices based on forked versions of Android, such as Fire TV OS, that are not compatible with the Google-sanctioned version of Android. This even applies across device categories, according to two sources: Manufacturers that have signed on to the Android Compatibility Commitment for their mobile phone business are effectively not allowed to build Fire TV devices.

"You cannot manufacture any of those noncompliant devices," the senior employee told Protocol. This type of contract was unlike any other partnership agreements in the industry, he said. "It's completely unique."

TV manufacturers lose an option

Google's use of the Android Compatibility Commitment in the smart TV space has been an open secret in the consumer electronics industry for some time, according to the senior employee of a TV manufacturer. "In this field, everybody knows that," he said.



But even with that knowledge, manufacturers have to deal with a number of uncertainties. Two sources suggested that Google may have in the past, in limited instances, granted certain exceptions to the Android Compatibility Commitment. Third-party manufacturers have for instance been able to build devices running both operating systems, as long as the brands those devices are sold under aren't owned by the same company.

This gets further complicated by the realities of the consumer electronics industry, in which manufacturers often license brands for a subset of territories or device categories. If you buy a TV from a certain brand in Europe, it may be made by a different manufacturer and run a different operating system than a TV from the same brand bought in North America, for instance.

What's more, manufacturers often build devices under multiple brands, including those used by major retailers. And while a consumer electronics company may use Android TV, Fire TV OS or Roku's platform for its U.S. customers, it may decide to use a different operating system in Europe or Latin America. Limiting those choices makes it a lot harder for manufacturers to compete with giants like Samsung or LG, which have developed their own smart TV operating systems. Said the senior employee: "We lose an option."

An EU fine and a probe in India



Google's use of its Anti-Fragmentation Agreement first made headlines in 2016, when the European Union zeroed in on the policy as part of its antitrust investigation of Google's Android operating system. Back then, European regulators alleged that the company was "preventing manufacturers from selling smart mobile devices running on competing operating systems based on the Android open source code."



That investigation resulted in a €4.34 billion (around $4.9 billion) fine against the company. Google has appealed that fine, along with two other antitrust rulings, but it did make some significant concessions as a result. "Going forward, Android partners wishing to distribute Google apps may also build noncompatible, or forked, smartphones and tablets for the European Economic Area," wrote Google Android SVP Hiroshi Lockheimer at the time.

It's worth noting that Lockheimer specifically didn't mention smart TV devices, as the European Union's investigation solely focused on phones. Furthermore, any changes were limited to the European Union, with some doubting their effectiveness altogether. "Google has dragged its feet in complying with the Commission decisions," said European antitrust expert Damien Geradin, who co-authored a Harvard Business School report on Google's use of anti-fragmentation agreements in 2016. "Compliance is not in their DNA, and they are trying to buy time."

More recently, Google's Android licensing requirements have also attracted scrutiny in India, where Android controls 80% of the mobile market. The country's Competition Commission noted last April that by requiring device manufacturers to sign these requirements, "Google has reduced the ability and incentive of device manufacturers to develop and sell devices operating on alternative versions of Android."

"They hate forks officially due to the risk of fragmentation, but in reality because it creates competition outside their walled garden," Geradin said. "If they can make the life of companies that intend to produce forks very difficult, they will do so." Regulators should be "much harder with Google when it comes to remedies," he argued.

Amazon and Google's contentious history

Amazon and Google have long competed with each other in the living room, and executives have been fairly open about the rivalry. "What keeps us awake at night is Amazon," said Shalini Govil-Pai, who leads Google's Android TV efforts, when asked about the company's biggest rival during an interview last fall.

Amazon's Whitten gave a more diplomatic answer during an interview at CES but also admitted, "The most places where we're directly competing is probably Google." A source who had been briefed on Amazon's Fire TV efforts last year was more explicit: "Their view was that Google was their only competition."

That competition boiled over in 2015 when Amazon stopped selling Google's Chromecast streaming adapter, which was followed by Google blocking Amazon from accessing YouTube on its Echo Show and Fire TV devices in late 2017. The two companies ultimately ended that dispute last year.

However, it may be shortsighted to only cast Google's use of the Android Compatibility Commitment as a way to keep Amazon at bay. The policy also has the potential of blocking others, including TV manufacturers looking for ways to develop their own operating systems, from building devices based on forked versions of Android. And ultimately, it touches on issues of competition, or lack thereof, in the TV space that have a ripple effect across the ecosystem.

Among app developers, there is a general sense of unease about having less competition among smart TV platforms. Most developers have business relationships with both Google and Amazon, making it harder for them to speak out publicly. In a conversation with Protocol, a developer of a popular streaming app suggested that healthy competition in the space was essential to negotiate fair business terms with smart TV platform operators.

"What's important for us is seeing that there is competition in the market," that developer said. "If there are monopolies in this space, then the interests of users and the interests of content providers are at risk."