CCI imposes Rs 1,337 crore fine on Google over abuse of dominant position

The Competition Commission of India (CCI) on Thursday imposed a penalty of Rs 1,337.76 crore on technology major Google over abuse of dominant position in multiple markets in the Android mobile device ecosystem.

The CCI tweeted the imposition of monetary penalty and wrote, “CCI imposes monetary penalty of ₹ 1337.76 crore on Google for abusing dominant position in multiple markets in the Android Mobile device ecosystem.”

The anti-trust regulator also directed the internet major to cease and desist from unfair business practices.

The CCI in a statement said that google has been given a time of 30 days to provide the requisite financial details and supporting documents.

In relation to computation of penalty, the Commission noted that there were glaring inconsistencies and wide disclaimers in presenting various revenue data points by Google, it said.

According to fair trade regulator, Google manages the Android operating system as well as other licenses which gives it advantage over its competitors to pre-install most prominent search entry points such as search apps, widget and chrome browser on Android devices. Further, Google also secured significant competitive edge over its competitors, in relation to its another revenue earning app such as. YouTube in the Android devices.

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

An email query sent to Google remained unanswered till press time.

According to Statcounter, 95.46% of smartphones in India run on Android OS as of September 2022, while 4.09% run on Apple’s iOS.

CCI’s investigation into Google’s alleged abuse of its dominant position as the key supplier of Android OS licenses dates back to May 2019. Back then, Google argued that Android enabled millions of Indians to connect to the Internet by making smartphones more affordable.

After two years of probing, CCI concluded in September 2021 that Google had abused its dominant position to illegally hurt competitors in India. The watchdog had found that Google was also forcing OEMs to pre-install some of its apps along with the Android OS.  

Though most OEMs are free to develop their own Android OS using Android Open Source Project (AOSP), getting an Android license from Google gives them access to Google’s Play Services, which includes the Play Store, Security Update, and Play Protect. Being stripped of the Android license can be catastrophic for OEMs. A case in point is Huawei, which saw its market share crash after Google suspended Huawei’s license in May 2019 following an order from the US government. From being the second leading global brand with a 17% market share in Q1 2019, as per Counterpoint, Huawei is not even in the top five in 2022.

Google is under CCI scanner for allegedly abusing its position on several counts. In November 2020, CCI started an investigation against Google for allegedly abusing its dominant position and forcing developers to exclusively use its billing system for in-app purchases and promoting its payment service Google Pay on Android smartphones.  CCI is also probing Google for allegedly forcing smart TV brands to pre-install certain Google apps in another case.