The Competition Commission of India (CCI) in a report found Google guilty of abusing the dominant position of its Android operating system in India. They claim that Google is trying to illegally hurt its competitors in the world’s second-largest internet market. The investigation arm has pointed out that Google has been using anti-competitive, unfair, and restrictive trade practices in the mobile operating system and related markets.
The report was based on a two-year probe and released in June this year. The commission had ordered an anti-trust probe against Google in April 2019 for abusing its dominant position with Android to block market rivals.
Additionally, the report found Google’s requirement to mandate pre-installation of its apps to be in violation of India’s competition law. The 750-page report stated that the company leveraged the position of its Play Store app.
Play Store is described as a must-have app to protect its dominance and the mandatory pre-installation of apps. This simply puts an unfair condition on the device manufacturers.
More than 60 firms including Amazon and Apple responded to queries from the Indian watchdog — the Competition Commission of India — during the course of the investigation, the report said.
Google said that it looks forward to engaging with the CCI to demonstrate how Android has led to more competition and innovation, not less. So, in violation of the competition law based on the report, the commission can levy penalties or issue directions to the company.
However, before the final order senior CCI members will review the report and give Google another chance to defend itself.
Why was the probe ordered?
To briefly say how CCI works – Its responsibility is to eliminate practices having adverse effects on competition, thus promoting sustenance and competition in the market. Google’s unfair dominance in India was observed for a long time to disrupt the competition within the local smartphone market.
Hence, the probe was triggered in April 2019 after two Indian junior antitrust research associates and a law student filed a complaint – report from Reuters.
The CCI had ordered a probe into the American search engine giant, who with its Android OS controls over 98% of the Indian smartphone market.
During the two-year-long investigation, the panel questioned Google and other firms such as Apple, Microsoft, Amazon, Paytm, PhonePe, Mozilla, Samsung, Xiaomi, Vivo, Oppo, and more.
Complaints received from the competitors
The probe looked into multiple issues after CCI received complaints that Google India had restricted market access to rival mobile apps and services. They ask the manufacturers of devices to sign certain exclusive deals to pre-install Google's proprietary apps or services.
As per its own exclusive terms, the tech major offered its Google Mobile Services (GMS) suite which has apps such as Google Playstore, YouTube, and Chrome browser bundled together.
Device makers seeking to upgrade from the "bare Android version" are required to sign a Mobile Application Distribution Agreement (MADA) and further an Anti-Fragmentation Agreement (AFA)/Android Compatibility Commitment (ACC).
This requires pre-installation of Google apps and placement of these on the devices.
Findings of the probe
The probe revealed that Google India was guilty of stifling competition and innovation. In order to maintain its grip and dominance in search, music (through YouTube), browser (Chrome), app library (Play Store), and other key services.
The panel has accused Google of enforcing one-sided contracts on devices and app makers so that its own apps and products maintain primacy in consumer usage and come pre-installed on devices.
It held Google guilty of multiple charges such as:
- abuse of dominance in the market,
- restricting technical or scientific development,
- relating to goods or services to the prejudice of consumers and,
- denial of market access to competitors.
“Google is found to be contravening the provisions of Section 4(2)(a)(i); Section 4(2)(b); Section 4(2)(c); Section 4(2)(d) and Section 4(2)(e) of the Competition Act,” the probe report summarised.
Attractive revenue offered by Google to competitors
The report also mentioned that device manufacturers and other partners are offered attractive revenue sharing agreements, for giving primacy to a Google-only ecosystem of services and applications.
Regarding the search engine category, the probe says, "Competing general search services cannot offset the competitive advantage that Google ensures for itself through pre-installation and thus, acting as an entry barrier for competitors".
The 750-page report has been submitted to the CCI for consideration. If Google is held accountable, the firm may have to pay penalties.
It could even be asked to discontinue practices that intend to undermine competition and are anti-consumer basis market dominance.
Google has faced and is facing antitrust investigations in various parts of the globe - from the US to the European Union, Germany and Japan. But, it’s needless to say that India still remains a key growth market for Google. It said last year it would spend $10 billion here over five to seven years through equity investments and tie-ups, its biggest commitment to a key growth market.