Why has the CCI fined Google over Rs 1,300 crore for its Android devices? | Explained News,The Indian Express

Clipped from: https://indianexpress.com/article/explained/explained-economics/google-android-devices-competition-commission-india-fine-explained-8222377/

According to CCI, Google manages the Android operating system as well as other licences, which gives it advantage over its competitors to pre-install most prominent search entry points such as search apps, widget and Chrome browser on Android devices.

The CCI has given Google 30 days to provide the requisite financial details and supporting documents – the final penalty may increase.

The Competition Commission of India (CCI) has imposed a provisional penalty of Rs 1,337.76 crore ($162 million) on Google for “abusing its market dominant position” in multiple categories related to the Android mobile device ecosystem in the country.

The antitrust watchdog said Google had abused its dominance in the licensing of its operating system for smart mobile devices, app store market for Android smart mobiles, general web search services, non-operating system specific mobile web browsers, and online video hosting platforms.

Also Read |Why has the CCI imposed a Rs 392 crore fine on MakeMyTrip, Goibibo and OYO?

Beyond the monetary penalty, other ramifications for Google

The CCI also issued cease and desist directions to the tech giant on a number of its business practices. For instance, it said that Google should not deny access to its Play Services plugins to “disadvantaged” original equipment manufacturers (OEMs), and the licencing of Play Store to OEMs should not be linked to the requirement of pre-installing Google search, Chrome browser, YouTube, Google Maps, Gmail or any other Google application.

The CCI also said that Google will have to allow users to choose their default search engine during the initial device setup. It asked Google not to restrict the ability of app developers to distribute their apps through side-loading – offering their apps outside of Google’s Play Store. This is significant since Google has, for long, cautioned users against side-loading apps, calling it a potential security threat.

The CCI has given Google 30 days to provide the requisite financial details and supporting documents – the final penalty may increase.

According to CCI, Google manages the Android operating system as well as other licences, which gives it advantage over its competitors to pre-install most prominent search entry points such as search apps, widget and Chrome browser on Android devices. Further, Google also secured a significant competitive edge in relation to its other revenue earning apps like YouTube in the Android devices, it held.

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“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 Agreement) Network effects, coupled with status quo bias, creating significant entry barriers for competitors of Google to enter or operate in the concerned markets,” CCI said in its order.

How the case started

In 2019, the CCI had ordered a detailed probe following complaints by consumers of Android-based smartphones. Android is an open-source, mobile operating system installed by OEMs of smartphones and tablets.

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In September 2021, after a report of CCI’s initial findings on Google was leaked, the company had initiated legal action against the regulator. This is the second time that the tech giant has been fined by the CCI. In 2018, it had imposed a fine of Rs 136 crore on Google for unfair business practices in the Indian market for online search.

Google is facing a series of antitrust cases in India. The competition watchdog is also looking into Google’s business conduct in the smart TV market and its in-app payments system.

Putting CCI’s penalty in context

The quantum of CCI’s fine on Google is significantly lower as compared to penalties imposed on Google in other jurisdictions. In 2017, the European Commission had fined Google 2.42 billion euros for breaching the European Union’s antitrust rules after it found that the company had abused its market dominance as a search engine by giving illegal advantage to another Google product, its comparison shopping service. This year, the European Court of Justice’s General Court mostly confirmed a 2018 decision by the EU’s executive commission to slap Google with a fine of more than 4 billion euros ($3.99 billion).

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