CCI imposes Rs 1,338-crore fine on Google for 'anti-competitive practices'

The Competition Commission of India (CCI) imposed a penalty of Rs 1,337.76 crore on Google for abusing its dominant position in multiple markets with its Android mobile operating system (OS), and prescribed a set of about a dozen key measures that the company has to comply with.

The regulator said makers of devices that run on Android shouldn’t be forced to pre-install Google services on their devices. It also asked Google to provide fair access to all stakeholders.

“Google shall not deny access to its Play Services APIs to disadvantage OEMs (mobile manufacturers), app developers and its existing or potential competitors,” said the CCI order.



“This would ensure interoperability of apps between Android OS which complies with compatibility requirements of Google and Android forks. By virtue of this remedy, the app developers would be able to port their apps easily onto Android forks.” Forks are modifications made to the code.

CCI said the onus is on dominant players such as Google to ensure their conduct doesn’t affect competition on merit. It noted that Google has perpetuated its dominant position in the online search market, resulting in denial of market access to competing apps. It has also used its dominant position in the Android app store market to protect its position in online general search, which violates competition law, it said.

In April 2019, the regulator had ordered a detailed probe following complaints by users of Android-based smartphones in the country. Google’s Android is an open-source, mobile operating system installed by OEMs of smartphones and tablets. At the centre of the case are various agreements Google enters into with mobile manufacturers for using Android. The terms and conditions of these impose restrictions on the mobile companies, forcing them to exclude the services being offered by Google’s rivals.

Google vs Apple

A key observation by the CCI related to Google’s claim that it was not a dominant player in the market and that it faced competition from rival Apple. The CCI disagreed with this, saying that the Google Play Store and the Apple App Store were not mutually substitutable and the companies followed different business approaches.

“The commission further noted that there might be some degree of competition between the two mobile ecosystems, i.e., Android and Apple, however, that too is also limited at the time of deciding as to which device to buy,” the CCI said. “At that stage also, the commission was of the considered view that the primary and the most significant factor in the mind of an end user is the hardware specification and the device price.”

Google licenses its proprietary applications to mobile phone manufacturers for use in devices. They enter into multiple agreements such as the Mobile Application Distribution Agreement (MADA), Anti-Fragmentation Agreement (AFA), Android Compatibility Commitment Agreement (ACC), Revenue Sharing Agreement (RSA). CCI noted that through MADA Google ensures that the most prominent search entry points including search app, widget and Chrome browser come pre-installed on mobile devices, ensuring a competitive edge to Google search services.

“The competitors of these services could never avail the same level of market access which Google secured and embedded for itself through MADA,” the CCI said. “Network effects, coupled with status quo bias, create significant entry barriers for competitors of Google to enter or operate in the concerned markets.”

On the other hand, AFA and ACC agreements guarantee that distribution channels for competing search services are eliminated since these prohibit mobile manufacturers from offering rival services on Android-based devices. The RSA helps Google to secure exclusivity for its search services to the total exclusion of competitors, the CCI observed.

“The combined results of these agreements guaranteed a continuous access to search queries of mobile users which helped not only in protecting the advertisement revenue but also to reap the network effects through continuous improvement of services, to the exclusion of competitors,” CCI said in a press release. “With these agreements in place, the competitors never stood a chance to compete effectively with Google and ultimately these agreements resulted in foreclosing the market for them as well as eliminating choice for users.”