Google has been slapped with a fine of INR 1337.76 crore on Thursday by the Competition Commission of India (CCI) for allegedly violating a number of Section 4 of the Competition Act’s fundamental regulations and abusing its dominant position in numerous markets using its Android mobile operating system.
The regulator also issued a cease-and-desist order against Google, requesting that it stop using unfair business tactics, and it gave the internet giant a deadline by which to change its behaviour.
“Android device manufacturers shouldn’t be required to pre-install Google services on their products. All stakeholders should have equal access to Google. The business shouldn’t restrict access to its Play Services APIs in order to hurt OEMs, app developers, and potential rivals “the CCI order stated.
During the course of inquiry, Google argued about the competitive constraints being faced from Apple. In relation to understanding the extent of competition between Google’s Android ecosystem and Apple’s iOS ecosystem, the Commission noted the differences in the two business models which affect the underlying incentives of business decisions. Apple’s business is primarily based on a vertically integrated smart device ecosystem which focuses on sale of high-end smart devices with state of the art software components. Whereas Google’s business 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 which directly affects sale of online advertising services by Google
CCI imposes a monetary penalty of Rs. 1337.76 crore on Google for anti-competitive practices in relation to Android mobile devices
The directive went on to say, “This will ensure that apps on Android OS comply with Google’s and Android forks’ compatibility criteria (the modifications made to the code). This solution would make it simple for app developers to migrate their products to Android forks.”
“It should be highlighted that Google has maintained its hegemony in the internet search business, denying other apps access to the market. Additionally, it has violated competition law by defending its position in online general search with the help of its dominant position in the Android app store market “CCI released a statement.
Previous sources state that the CCI requested a thorough investigation in 2019 in response to concerns made by countrywide Android smartphone users.
The Commission opined that the 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. By virtue of the agreements discussed above, Google ensured that users continue to use its search services on mobile devices which facilitated un-interrupted growth of advertisement revenue for Google. Further, it also helped Google to further invest and improve its services to the exclusion of others. Thus, the underlying objective of Google in imposing various restrictions via MADA, AFA/ ACC and RSAs was to protect and strengthen its dominant position in general search services and thus, its revenues via search advertisements.
In relation to computation of penalty, the Commission noted that there were glaring inconsistencies and wide disclaimers in presenting various revenue data points by Google. However, in the interest of justice and with an intent of ensuring necessary market correction at the earliest, the Commission quantified the provisional monetary penalties on the basis of the data presented by Google. Accordingly, the Commission imposed a penalty of Rs. 1337.76 crore upon Google on provisional basis, for violating Section 4 of the Act. Google has been given a time of 30 days to provide the requisite financial details and supporting documents.
According to reports, Google has 30 days to submit the necessary financial information and supporting documentation.
