Google slapped with a Rs 1338 crore fine for “anti-competitive practices”
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The Indian anti-competition body, Competition Commission of India (CCI), announced a penalty of Rs 1338 crore on Google, citing the abuse of the tech giants’ dominant position in multiple domains such as mobile OS, web browser, play store, search, and video sharing amongst others. In addition to this, the antitrust regulator also put out a list of measures that the company needs to comply with and has barred Google from carrying out unfair business practices.
Google’s justifications regarding its practices, citing its competitive constraints from Apple, were dismissed. The CCI concluded that there is no substitutability between Google’s Play Store for Android OS and Apple’s App Store for iOS for consumers. While Apple’s business is based on a vertically integrated smart device ecosystem, however in Google’s case it is driven more by its focus on increasing users on its platforms
The CCI stated that Google is resorting to unfair practices in the following ways:
Mandatory pre-installation of the entire Google Mobile Suit (GMS) under restrictive agreements with OEMs (Original Equipment Manufactures), without an option to un-install the same, is a violation of fair competition.
Some of the most prominent search entry points i.e., search app, widget and chrome browser are pre-installed on Android devices. This gave Google a significant competitive advantage over its competitors in various fields.
Again, by virtue of agreements, Google ensured the elimination of distribution channels for all search services by prohibiting OEMs from developing or offering such services.
Apart from the monetary penalty imposed on the behemoth, CCI has also issued a cease-and-desist order for all the anti-competitive practices, including:
Google needs to stop linking licensing of Play Store with the prerequisite of installing Google applications, such as YouTube, Chrome, Maps etc.
Access of its Play Services APIs cannot be denied to OEMs, app developers and its competitors, to ensure interoperability of apps within the Android ecosystem
Google must not incentivise or offer monetary benefits to OEMs for ensuring the exclusivity of its search services
Users must be allowed to un-install pre-installed apps
Google must allow developers of app stores to distribute their apps through Play Store, and cannot restrict them in any manner
The current penalty is based on the quantified monetary penalties based on data presented by Google. The Commission also noted that glaring inconsistencies remain in the data points which were presented by the company and has provided Google 30 days to provide requisite financial details and supporting documents.
The verdict issued by the CCI is a monumental step towards fair competition and practices in India. Imposing a hefty fine and giving out strict directives to a powerhouse such as Google shows that the Commission is concerned about providing fair market conditions to both smaller and new players and is intent on having a level-playing field for all. This decision could go a long way in sending out a strong message to everyone that abusing one’s dominant position or resorting to unfair practices could lead to catastrophic consequences.