Oracle v. Google and Game Theory
Oracle America, Inc. v. Google, Inc.
What happens if Google loses the Oracle suit?
In 1996, Sun Microsystems released a programming language, Java, along with a set of libraries, to the public. In 2003, Android Inc, purchased by Google only two years later, began using Java to develop the mobile operating system, Android. The makers of Android approached Sun Microsystems for a license to incorporate Java’s libraries into their operating system. However, the deal fell through as Sun Microsystems wanted a stake in Android, against Google’s wishes, while Google refused to uphold Java’s interoperability standard, against Sun Microsystems’ wishes. Consequently, Google implemented the infrastructure around Java themselves to avoid having to pay Sun Microsystems for their libraries and in doing so copied the structure of the code that Sun Microsystems wrote. The year that Sun Microsystems was acquired by Oracle, 2010, Oracle decided to sue Google for their self-implementation of Java. This lawsuit set off a chain of trials, appeals, and petitions from both Google and Oracle as each attempted to win the dispute in their favor.
To explain why this quarrel seems never-ending, we can apply game theory to a pay-off matrix:
Where the option to “continue” means to continue the ongoing court dispute and “give up” means to give up and accept loss in the court dispute.
If Oracle and Google decided to keep the dispute going, both must pay for all the costs that come with sustaining a drawn out court battle. However, while the trial is ongoing, Google gets to use and profit off of Android and Oracle hangs on to the chance of winning billions from Google. If Oracle continues the lawsuit and Google gives up, Oracle gets billions of dollars while Google’s operating system becomes held hostage by Oracle. In this position, Oracle has the leverage to either demand large sums of money in exchange for letting Google use the Android or stifle the operating system entirely to create new space in the market for mobile operating systems. If Google continues defending and Oracle gives up, Google’s operating system remains profitable and in their hands. If both Google and Oracle give up, Google retains its operating system, albeit with an uncertain future (Oracle, or someone else could sue Google in a similar fashion), while Oracle gets practically nothing. In other words, Google’s payoff is greater if they continue the court case– no matter what Oracle does. Oracle’s payoff is greater if they continue the court case– no matter what Google does. This means that there is a Nash equilibrium where both Google and Oracle continue their dispute. For this reason, the Google-Oracle lawsuit has been thriving since 2010 and will likely remain an object of active debate for years to come.