CCI fines Google ₹1.3k-cr over unfair biz practices

NEW DELHI: The Competition Commission of India (CCI) on Thursday imposed a penalty of ₹1,337.76 crore on technology major Google for abusing its dominant position as the developer of the backbone operating system (OS) software that a wide variety of mobile phone makers deploy on their products.

The fine covers what CCI said were anti-competitive practices by Google in the markets for mobile operating system (OS), app stores, web search services, web browsers, and online video hosting services. This includes Android OS, Google Play Store, Google Search, Chrome browser, and YouTube.

“Markets should be allowed to compete on merits, and the onus is on the dominant players (in the present case, Google) that its conduct does not impinge this competition on merits,” the commission said in a statement.

Noting that based on its assessment, the “commission found Google to be dominant in all the above-mentioned relevant markets”, CCI also issued nine specific “cease and desist” directions to the American tech giant. These included allowing other app stores to offer their products on its platform, letting users choose their own search engine and delete preinstalled applications, and allowing device makers to decide for themselves which Google product they will offer with their products and how they will be placed.

The CCI statement said Google

Abeen given a time of 30 days to provide requisite financial details and supporting documents in relation to its revenue streams, which it said had “glaring inconsistencies and wide disclaimers”. The commission said it quantified the provisional monetary penalty on a provisional basis.

According to the fair trade regulator, Google manages the Android operating system as well as other licenses which gives it advantage over its competitors to pre-install most prominent search entry points such as the Search app, widgets, and Chrome browser, on Android devices. Google also secured significant competitive edge over its competitors in relation to its another revenueearning apps, such as YouTube, it noted. “The competitors of these services could never avail the same level of market access which Google secured and embedded for itself through MADA (Mobile Application Distribution Agreepapaver Network effects, coupled with status quo bias, create significant entry barriers for competitors of Google to enter or operate in the concerned markets,” it said.

An email sent to Google remained unanswered till press time.

Google’s Android operating system powers 97% of India’s 600 million smartphones, according to Counterpoint Research, news agency Reuters reported.

The CCI also rejected Google’s defence that it faced competition from Apple, saying both companies had different business models. While Apple’s was “primarily based on a vertically integrated smart device ecosystem” that focussed on sale of high-end devices, Google’s “was found to be driven by the ultimate intent of increasing users on its platforms so that they interact with its revenue earning service i.e., online search”. CCI’s investigation into Google’s alleged abuse of its domihas nant position as the key supplier of Android OS licenses dates back to May 2019. Back then, Google argued that Android-enabled millions of Indians to connect to the Internet by making smartphones more affordable.

After two years of probing, CCI concluded in September 2021 that Google had abused its dominant position to illegally hurt competitors in India. The watchdog had found that Google was also forcing OEMs to pre-install some of its apps along with the Android OS.

Though most OEMs are free to develop their own Android OS using Android Open Source Project (AOSP), getting an Android license from Google gives them access to Google’s Play Services, which includes the Play Store, security updates, and Play Protect. Being stripped of the Android license can be catastrophic for OEMs, since the app store offers the backbone for the modern smartphone experience that hinges on applications and routine software updates are crucial for device security.

In November 2020, CCI also started an investigation against Google for allegedly abusing its dominant position and forcing developers to exclusively use its billing system for in-app purchases and promoting its payment service Google Pay on Android smartphones. CCI is also probing Google for allegedly forcing smart TV brands to pre-install certain Google apps in another case.