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Business News/ Companies / News/  Google calls CCI’s fine a setback for users, businesses
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Google calls CCI’s fine a setback for users, businesses

On Thursday, the CCI imposed a ₹1,338 crore fine on Google for abusing its dominant position in the Android ecosystem and prohibited it from indulging in anti-competitive practices

Google said the competition watchdog’s move opens serious security risks and raises the cost of mobile devices for Indians. (Reuters)Premium
Google said the competition watchdog’s move opens serious security risks and raises the cost of mobile devices for Indians. (Reuters)

Google on Friday termed the Competition Commission of India’s (CCI) Thursday order as a “major setback" for businesses and consumers, adding it will expose users to “serious security risks" and raise the cost of mobile devices. Google said it would review the CCI decision to evaluate its course of action.

On Thursday, the CCI imposed a 1,338 crore fine on Google for abusing its dominant position in the Android ecosystem and prohibited it from indulging in anti-competitive practices. It said the Android operating system gives Google an advantage over its competitors to pre-install prominent entry points such as search apps, widgets and the Chrome browser. It said Google was also forcing phone makers to pre-install some of its apps, along with the Android OS.

“Android has created more choices for everyone and supports thousands of successful businesses in India and around the world. The CCI’s decision is a major setback for Indian consumers and businesses, opening serious security risks for Indians who trust Android’s security features and raising the cost of mobile devices for Indians. We will review the decision to evaluate the next steps," a Google spokesperson said in an email statement.

Though the quantum of the fine seems huge, industry experts said it would not have a major impact on Google. “The fine itself is not particularly significant—if you look at it, what CCI has fined Google is around 5% of what the European Union has penalized Google for its anti-competitive practices with Search and other products," said Prasanto K. Roy, a technology policy consultant. That said, Roy said, the ruling will impact Google’s business model. “A large part of the order is based on channelling the company’s Search and other apps that it feeds through Android. The moment you restrict Search, that is a fairly significant diversion of revenue," added Roy.

Trishee Goyal, a research fellow at Vidhi Centre for Legal Policy, said the ruling would also impact the commission Google earns from Play Store. “It also impacts how well their apps will be distributed. If their apps are facing more competition due to reduced commission from other apps, it will also impact revenue from that stream," she added.

Roy said the order would set a new precedent and could have implications globally as India is a major Android market. According to Counterpoint Research, nearly 97% of India’s 600-odd million smartphone users are on Android. “Most European regulations have been focused on Search, and even though India looks up to the EU to regulate tech, Asian markets look at India for the same. This could be a major point of interest, as a result," Roy said.

“Google will likely challenge CCI’s order in court and may even offer other benefits such as opening up in-app commissions to keep their market position intact," a legal expert said on the condition of anonymity. The person said this regulation could affect the way the world’s most popular mobile operating system functions.

“This may offer a precedent for other tech firms such as Amazon, which restricts seller listings, to prioritize affiliated brands," he added.

CCI also ordered Google not to force device makers to pre-install a bundle of Google apps but let them choose what they want. Also, licensing of Play Store should not be conditioned on pre-installation of Google search services, Chrome browser, YouTube, Google Maps, Gmail, or other Google apps. CCI also said Google should allow the distribution of third-party app stores through Play Store.

Goyal believes this is a gaming-changing move and can increase competition.

“Google doesn’t charge the same commission from its apps as it does from other non-Google-owned apps. This puts third-party apps at a disadvantage when it has to compete with Google’s in-house apps because commission costs often end up getting passed on to the consumer one way or the other," she added.

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ABOUT THE AUTHOR
Abhijit Ahaskar
Abhijit writes on tech policy, gaming, security, AI, robotics, electronics and startups. He has been in the media industry for over 12 years.
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Published: 21 Oct 2022, 11:33 PM IST
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