Tuesday, May 28, 2024

Google fined Rs 1,338 Cr by CCI for abusing dominance in market

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Google has been fined Rs 1,338 crores by the Competition Commission of India (CCI) for abusing its market dominance in certain segments of the Indian ecosystem for Android-based mobile devices. The internet behemoth was told to quit using unethical business tactics by the fair trade regulator.

The (CCI) stated in a statement that it has also instructed Google to change its behaviour within a specific time frame. CCI is also investigating Google for allegedly compelling smart TV manufacturers to pre-install specific Google applications and for abusing its dominant position to force developers to only utilise its in-app pricing mechanism and promote its Google Pay service.

CCI said that because Google controls the Android operating system and other licences, it has an edge over its rivals in that it can pre-install the Chrome browser and other popular search entry points like search applications and widgets on Android devices. Additionally, Google possessed a considerable competitive advantage over its other revenue-generating apps on Android smartphones, such as YouTube.

The commission ruled that Google should not bar underprivileged original equipment manufacturers (OEMs) from using its Play Services plugins and that licencing Play Store to Device manufacturers should not be conditional on them pre-installing any Google application.

Findings of CCI

In the case against Google, the Commission identified five relevant markets to check on the behaviour of the company. They are (a) the market for licensable OS for smart mobile devices in India, (b) the market for an app store for Android smart mobile OS in India (c) the market for general web search services in India (d) market for non-OS specific mobile web browsers in India and (e) market for online video hosting platform (OVHP) in India.

The Press Release by CCI.

The commission determined that Google secured its users and continued to utilise its search services on mobile devices, allowing Google to generate its advertisement income without interruption. Furthermore, it aided Google in sustaining its investment there and developing its services at the expense of rivals. Consequently, Google’s underlying goal in imposing numerous limits through multiple agreements was to safeguard and strengthen its dominating position in general search services, and thus its earnings from search adverts.

The Commission thus punished Google for engaging in anti-competitive behaviour that was found to be in breach of Section 4 of the Competition Act 2002 by imposing a monetary fine and a cease and desist order in line with Section 27 of the Competition Act 2002. The Commission found apparent anomalies and broad caveats in Google’s presentation of several financial datasets. However, in the interest of fairness and to ensure that required market corrections occur as soon as possible, the Commission estimated the interim monetary penalty based on the data provided by Google.

The commission further ordered that the OEMs shall not be restricted from selecting from among Google’s proprietary applications to be pre-installed and shall not be forced to pre-install a bouquet of applications; Google shall not offer any monetary/other incentives to or enter into any arrangement with, OEMs to ensure exclusivity for its search services; Google shall not restrict users’ ability to uninstall Google’s pre-installed apps.

In India, Google is facing a slew of antitrust lawsuits. Following consumer complaints over Android-based phones, the CCI launched a thorough investigation in 2019. The CCI has penalised the internet behemoth for the second time. In 2018, it fined Google Rs 136 crore for market abuse in the Indian internet search sector.

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