The Competition Commission of India (Commission) has imposed a penalty of Rs. 1,337.76 crore on Google for abusing its dominant position in multiple markets in the Android Mobile device ecosystem, apart from issuing cease and desist order.
Key points
- The CCI also directed Google to modify its conduct within a defined timeline.
- Smart mobile devices need an operating system (OS) to run applications (apps) and programs. Android is one such mobile operating systems which was acquired by Google in 2005.
- The CCI in the instant matter has examined various practices of Google w.r.t. licensing of this Android mobile operating system and various proprietary mobile applications of Google (e.g. Play Store, Google Search, Google Chrome, YouTube, etc.).
- During the course of inquiry, Google argued about the competitive constraints being faced from Apple.
- In relation to understanding the extent of competition between Google’s Android ecosystem and Apple’s iOS ecosystem, the CCI noted the differences in the two business models which affect the underlying incentives of business decisions.
- Apple’s business is primarily based on a vertically integrated smart device ecosystem which focuses on sale of high-end smart devices with state of the art software components. Whereas Google’s business was found to be driven by the ultimate intent of increasing users on its platforms so that they interact with its revenue earning service i.e., online search which directly affects sale of online advertising services by Google.
- CCI found that mandatory pre-installation of entire Google Mobile Suite (GMS) under MADA (with no option to un-install the same) and their prominent placement amounts to imposition of unfair condition on the device manufacturers and thereby in contravention of the provisions of Section 4(2)(a)(i) of the Act.
- These obligations are also found to be in the nature of supplementary obligations imposed by Google on OEMs (original equipment manufacturer (OEM)) and thus, in contravention of Section 4(2)(d) of the Act.
- Google has perpetuated its dominant position in the online search market resulting in denial of market access for competing search apps in contravention of Section 4(2)(c) of the Act.
