Why was Google fined?
Simply put, Google was penalized for abusing its position in the Android ecosystem. In the penalty imposed on Tuesday, the CCI fined Google for anti-competitive practices related to its Play Store policies. The penalty is due to the Google Play Store policy that benefits Google from apps released in the market. Google policy restricts developers to only use Google Play’s Billing System (GPBS) for billing users for purchases made in their apps.
Developers cannot include a direct link for alternative payment methods, and they cannot include wording that encourages users to purchase digital goods outside of the app. This is part of the “anti-steering” provisions of Google’s policy. CCI concluded that Google dominated the Indian markets for app stores for Android smart mobile OS and licensed OS for smart mobile devices and forcing app developers to use GPBS was unfair and arbitrary.
Last week, Google was fined for Google’s Android agreements, such as the Mobile Application Distribution Agreement (MADA). MADA is an agreement by Google that allows manufacturers to agree to launch Android devices with preloaded Google apps such as Search, YouTube, Gmail and more. This “gives Google apps and services a significant competitive advantage over its competitors, given the size of the Android market in India.”
“Competitors of these services will never have the same level of market access that Google secures and embeds through MADA… Google’s competitors will create significant entry barriers to enter or operate in the relevant markets,” CCI said in a statement.
What CCI Says
The CCI said Google is abusing its dominant position in multiple markets within the Android ecosystem. The competition regulator said on Friday that Google’s competitors offering similar apps and services as the company would never get the same level of market access secured and embedded by Google through MADA. Recently, the CCI noted that the primary software distribution channel of the Android mobile ecosystem is Google’s Play Store, which enables its owners (Google) to profit from the apps released to the market.
What Google said
Google, on Wednesday, October 25, said the company is committed to its users and developers and is reviewing the decision to evaluate next steps. Indian developers have benefited from the technology, security, consumer protection & unparalleled choice & convenience offered by Android & Google Play. By keeping costs low, our model has powered India’s digital transformation and expanded access to hundreds of millions of Indians.
The company’s previous announcement on Friday was also similar. Google said the CCI’s decision was a major setback for Indian consumers and businesses, opening up a serious security risk for Indians who trust Android. “CCI’s decision is a major setback for Indian consumers and businesses, opens serious security risks to Indians who trust Android’s security features, and increases the cost of mobile devices for Indians. We will review the decision to evaluate next steps,” a Google spokesperson said Friday.
Google, in an earlier case, also pointed to competitor Apple, arguing that it faces similar obstacles from Apple as well.
What are Google’s next steps?
Google’s next steps are only two: The company admits guilt and pays Rs. 2,274 crore can either pay the fine or appeal the CCI’s decision and try to dispute the fine. Google is unlikely to pay the hefty fine immediately, though the company says it is currently evaluating its position and details. If Google tries to dispute the fine, the company will have to file an appeal under the Competition Commission Act.
Will this affect Google’s business in India?
Currently, this will not affect Google’s market in the country. However, it asked Google to adopt eight remedies or operations adjustments within three months “without restricting app developers from using any third-party billing/payment processing services for in-app purchases or purchasing apps.” CCI order.
Similar anti-competition claims against Google in other countries
Last month, a US court allowed an antitrust case against Google to proceed, accusing the tech giant of monopolizing the ad-tech market and stifling competition with access to data it owns. The UK competition watchdog has also launched an investigation into Google’s unfair practices in the ad-tech business.
In September, the European Union also fined Google EUR 4.25 billion for the company’s antitrust practices. The EU’s record fine in all three investigations spans more than a decade, and has netted Google EUR 8.25 billion in fines.