What would this mean for Google's other products and services? How many of those have any hope of surviving without being subsidized? Search is by far Google's biggest money earner so that is safe. YouTube might be okay, but I don't know for sure. AFAIK everything else would be in a lot of trouble. Last I heard even Android would be in danger, as development cost's aren't covered merely by app store revenue.
I was going to answer this, but I think you may have answered it yourself with...
For all of Europe, MS was required to show Windows users a dialog, prompting them to choose their preferred browser, rather than just default to IE. I realize that fair treatment is not really the issue here, but if it was, then Google should be required to do the same, meaning Android device owners, during initial setup, would be prompted to choose which services they want to use, all of which would have to be put on equal footing in terms of OS integration. I'm not sure if Android could retain Google's interest under such circumstances.
I'm not saying this is what I'd like to see happen. It's just a thought experiment portraying what would happen if both companies were treated in the same way.
Pretty much this.
Without advantages in integration and being able to push those services, they become much less valuable to Google. If it were broken up into say... Search as one company and everything else as another, then without the interest of Google for user data, this other company would have to find additional sources of income. That could very well mean that since Gmail, maps, etc... Will remain free (because they're basically free industry wide), then the only real sources of income would be Android and YouTube. They'll have to grow faster than YouTube itself, which would probably mean that Android will become a paid product. I mean, I guess it doesn't HAVE to, but to gain investor support, they'll need it, since they won't have Sugar Daddy Google to subsidize the costs.
I mean really, the possibilities are endless. Will we be able to sign into the play store with Microsoft accounts? Or yahoo? Facebook? Will we have to make Android accounts? If they don't make money from Android, how will they pay the engineers? Will they have to fire them? That would slow down innovation in Android to the point that Android 6.0 could basically be iOS 5 to iOS 6 unless the open source community really steps their game up. Without that speed, Microsoft could make WP a much better experience than Android within a couple years.
I remember a few months ago, a commenter let us know his theory about how Android development could slow down to a halt if Google loses interest. I think you read it too since you quoted it. It looks like those plans could he accelerated.
Fascinating times we live in.