Google’s settlement with CCI over Android TVs: A win-win?
Summary
The Competition Commission of India (CCI) accepted a settlement proposal by Google, but not unanimously. Settlements of antitrust cases are better for businesses than having to face adverse CCI orders—which tend to result in further litigation.
The Competition Commission of India (CCI) recently issued its first settlement order in relation to Google’s alleged anti-competitive conduct in the Android TV ecosystem. India had allowed settlement of some competition law cases with the CCI in March 2024. Soon after, Google applied to the CCI to settle its smart TV (STV) case, in which the director general (DG) of investigation had already found evidence to suggest that Google’s conduct was abusive.
Within a year of the settlement application, the CCI decided to close its proceedings against Google based on a set of behavioural commitments and a settlement amount of ₹20.24 crore.
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The DG revealed that Google’s licensing regime required STV makers to pre-install the complete bundle of Google’s apps on their STVs, only two of which were found to be necessary (Android TV Play Store and Play Services). By requiring STV makers to install other apps such as YouTube and Google Assistant, Google reaped revenues not only from its ‘must-have’ apps, but also from others.
Additionally, as a pre-condition to install its proprietary apps, Google restrained STV makers from partnering with rival operating systems or developing such systems by means of Android forks, an open-source option. This restriction applied not only to STVs, but also to other devices sold by STV makers, including smart phones and smart watches. This impeded innovation and reduced consumer choice, as STV companies were restricted to Google’s ecosystem.
To address these concerns, Google proposed the following commitments to settle the case with the CCI: (i) the introduction of an alternative fee-based licensing regime permitting STV manufacturers to access/ install only the two ‘must-have’ apps; and (ii) a waiver of the restriction that prevented STV makers from developing Android Forks or partnering with competing operating systems across their device portfolio.
Three out of four CCI members found Google’s settlement package effective in addressing the competition law concerns identified by the investigation. One member disagreed. His point was that Google’s proposal to parallelly continue with its existing anti-competitive licensing regime may not adequately address the problem. The dissenting member has proposed a single regime free of all antitrust issues, instead of the two parallel regimes proposed by Google.
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Although the majority view on Google’s settlement proposal may pass muster on grounds of proportionality and practicality, the dissent order cannot be completely disregarded. Since the old licensing regime continues, Google may get several STV makers to opt for (and continue with) the old regime. This could render the new regime’s existence a mere compliance formality and diminish the intended effect of the settlement.
Effective implementation of behavioural remedies has been a challenge for antitrust authorities worldwide. Even mature jurisdictions, such as the European Union (EU), have struggled to ensure that remedies are implemented in their true spirit and achieve their intended effects.
The European Commission recently conducted an ‘ex-post evaluation of the implementation and effectiveness of EU antitrust remedies.’ It revealed that in over half of all non-cartel cases considered, there was no evidence that remedies were effective, despite implementation. The study highlighted that, unlike structural remedies, behavioural remedies were hard to monitor. Without a robust monitoring mechanism, companies may be able to exploit loopholes to delay or even bypass effective implementation of remedies. In many cases, parties could compromise the spirit of a remedy package whilst formally complying with its letter.
There is no doubt that the CCI’s remedy packages will also be critically evaluated for their effectiveness.
However, the CCI must continue to learn from the best practices emerging from the experience of mature jurisdictions and endeavour to ensure that remedies and their monitoring mechanisms achieve their intended effects to the extent possible.
The real carrot that would draw companies to opt for settlements is an opportunity to engage in constructive discussions with the CCI to arrive at remedy packages that could broadly address competition law concerns without disrupting their businesses. There is no such prospect if remedies are imposed by the Commission through contravention orders. In such cases, companies resort to litigation to challenge the commitments imposed.
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Recently, for example, Meta challenged a CCI order in the WhatsApp privacy policy case, claiming that the behavioural commitments imposed by it would lead to a potential collapse of its business model. Indeed, even Google has in the past contested remedies imposed by the CCI in other cases related to its search engine, Android smartphone ecosystem and Google Play Store.
The CCI also benefits from settlements. It frees up its limited resources and helps attain procedural efficiency. Since settlement orders cannot be appealed, there seems no better way of bringing finality to CCI orders. A large part of the penalties can be recovered as settlement amounts.
This mechanism may also prove crucial for timely redressal of anti-competitive concerns in digital markets, as India’s digital competition law is still far from seeing the light of day.
The authors are competition lawyers.
