The Competition Commission of India (CCI) on Thursday fined Google Rs 1,337.76 crore for allegedly abusing its dominant position in multiple markets in the Android mobile device ecosystem and violating Section 4 of the Competition Act. The CCI also issued a cease-and-desist order to Google asking it to desist from unfair business practices and directed the tech giant to modify its conduct within a specified period.
Google was given 30 days to provide the requested financial details and supporting documents. Google’s Android is the dominant operating system (OS) for smartphones in India and globally. The only competition is from Apple iOS. The commission said it imposed the fine because Google allegedly abused its dominant position in five markets – the market for licensed OSes for smart mobile devices; app store for Android smart mobile OS; general web search services market; the market for non-operating system-specific mobile web browsers; and the one for Online Video Hosting Platform (OVHP).
In its press statement, the CCI said it had found that “Google is dominant in all the above relevant markets”. The CCI has now concluded that the mandatory pre-installation of the entire Google Mobile Suite (GMS) under the Mobile Application and Distribution Agreement (MADA), without the option to uninstall it, and its prominent placement, imposes unfair conditions on device manufacturers and, thus, contravenes with the provisions of 4 paragraph 2 letter a) point i) of the Act on Economic Competition, which deals with the abuse of a dominant position.
The CCI recommended that original equipment manufacturers (OEMs) should not be prevented from choosing from Google’s proprietary apps to be pre-installed, should not be forced to pre-install a set of apps, and should be free to decide where to place pre-installed apps on their smart devices.
In its defense, Google cited the competition it faced from Apple. In this regard, CCI noted, “Apple’s business is primarily based on a vertically integrated smart device ecosystem that focuses on selling high-end smart devices with state-of-the-art software components. While Google’s business was found to be driven by the primary intention of increasing the number of users on its platforms to interact with its revenue-generating service, i.e. online search, which directly affects Google’s sales of online advertising services.”
Recommendation:
• Licensing of the Play Store (including Google Play Services) to OEMs must not be accompanied by a requirement to pre-install Google search services.
• It cannot deny access to its Play Services APIs to disadvantage OEMs, app developers, and its existing or potential competitors.
• Google will not restrict users from uninstalling its pre-installed apps
• Google will allow users to choose their default search engine during initial device setup
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