A two-year-long investigation of the Competition Commission Of India (CCI) has found Google guilty of abusing its dominant position of Android in India. The commission also found Google guilty of using anti-competitive, unfair, and restrictive trade practices in the Mobile Operating system and related markets.
According to Counterpoint research quoted by Reuters, Android OS controls over 98% of the Indian Smartphone market.
Brief background of the case
The CCI had ordered this investigation in 2019 after two competition law researchers filed a complaint.
Back when CCI ordered the investigation, it said Google appeared to have leveraged its dominance to reduce device makers’ ability to opt for alternate versions of its operating systems besides forcing them to pre-install Google apps.
Findings of the panel
During the two-year-long investigation, the CCI panel questioned 60 other entities too, including Apple, Microsoft, Amazon, Paytm, PhonePe, Mozilla, Samsung, Xiaomi, Vivo, and Oppo. Google also submitted at least 24 responses to the investigation panel.
Now, a 750-page report has concluded that Google was guilty of stifling competition and innovation. It says that Google forces device makers and app developers to sign one-sided contracts that help Google maintain its grip and dominance in search, music (through YouTube), Browser (Chrome), app library (Play Store), and other key services.
Further, it mandates any manufacturer wanting to go beyond the stock Android version to sign a Mobile Application Distribution Agreement (MADA) and an Anti- Fragmentation Agreement (AFA)/ Android Compatibility Commitment (ACC).
These agreements require pre-loading of Google apps and pre-determined placement on devices. The report says the mandatory pre-installation of apps “amounts to imposition of unfair condition on the device manufacturers.”
“Google is found to be contravening the provisions of Section (2)(a)(i), Section 4(2)(b), Section 4(2)(c), Section 4(2)(d) and Section 2(2)(e) of the Competition Act.”
Besides, if a device maker signs all the agreements, Google offers attractive revenue-sharing agreements for giving primacy to the Google-only ecosystem of services and applications.
Similar Complaint around ACC in India
Google is also facing a similar antitrust investigation in India with regard to Smart TVs. A complaint against Google alleges that Google signs an Android Compatibility Commitment (ACC) agreement with OEMs. The ACC requires OEMs to not sell Smart TVs which operate on a competing forked Android OS such as ColorOS or Amazon’s FireOS, neither shall they develop their own forked Android OS.
Surprisingly, Google also restrains TV manufacturers who sign these agreements, to adhere to obligations contained in the agreements not just in regard to the Smart TV market, but in regard to their entire device portfolio.
South Korea’s fine on a similar issue
Recently, South Korea imposed a $177 mn fine on Google for blocking customized Android versions. The Korea Fair Trade Commission said Google’s “anti-fragmentation agreement” (AFA), which it requires device producers to abide by, hamper competition. According to the AFA, device makers cannot equip their handsets with modified versions of Android. The decision bans Google from putting any such restrains on manufacturers.
What will happen next?
The CCI is yet to send the report to Google. Senior members of the commission will review the report and give Google one more chance to defend itself. If the Commission issues a final order against Google, it may impose fines. It may even ask Google to discontinue practices that intend to undermine competition and are anti-consumer.
The U.S. tech giant said in a statement it looks forward to working with the CCI to “demonstrate how Android has led to more competition and innovation, not less.”
Google can appeal against any adverse order in Indian courts.