CCI fines Google ₹936 crore for abusing dominance with Play Store policies

The Competition Commission of India (CCI) today imposed a penalty of ₹936.44 crore on Google for abusing its dominant position with respect to its Play Store policies, apart from issuing a cease-and-desist order, the CCI said in a press release.

The trade regulator also directed Google to modify its conduct within a defined timeline.

“For app developers, app stores have become a necessary medium for distribution of their apps to the end users and the availability of app store(s) is directly dependent on OS installed on a smart device. An appreciation of the market dynamics in licensable mobile operating system in India makes it evident that Google’s Android OS has successfully reaped the indirect network effects,” the statement reads.

Google’s Play Store constitutes the main distribution channel for app developers in the Android mobile ecosystem, which allows its owners to capitalize on the apps brought to market, it added.

Based on its assessment, the CCI found Google to be dominant in the markets for licensable OS for smart mobile devices & market for app stores for Android smart mobile OS, in India.

The CCI said in its report that because of Google’s several collaborative agreements with Youtube, Google was put in an advantageous position vis a vis its competitors in the online video domain.

The CCI has also examined the allegations of exclusion of rival UPI apps as effective payment options on Play Store. It was found that Google Pay has been integrated with intent flow methodology whereas other UPI apps can be used through collect flow methodology.

“It was noted that the intent flow technology is superior and user friendly than collect flow technology, with intent flow offering significant advantages to both customers and merchants and the success rate with the intent flow methodology being higher due to lower latency”, the order said.

Google has informed the CCI that it has recently changed its policy and has allowed rival UPI apps to be integrated with intent flow.

In relation to computation of penalty, the CCI noted that there were glaring inconsistencies and wide disclaimers in presenting various revenue data points by Google. However, in the interest of justice and with an intent of ensuring necessary market correction at the earliest, the CCI quantified the provisional monetary penalties on the basis of the data presented by Google.

“Accordingly, the CCI imposed a penalty @ 7% of its average relevant turnover amounting to ₹936.44 crore upon Google on provisional basis, for violating Section 4 of the Act. Google has been given a time of 30 days to provide the requisite financial details and supporting documents,” the order said.

This is the second major CCI ruling against Google in less than a week. On October 20, the watchdog imposed a penalty of ₹1,337.76 crore on the company for abusing its dominant position in multiple markets in relation to Android mobile devices and ordered the internet major to cease and desist from various unfair business practices.