CCI slaps Rs 1,337.76 cr penalty on Google for unfair business practices

PTI, Oct 21, 2022, 11:48 AM IST

Image credit: Reuters / File

New Delhi: The Competition Commission on Thursday slapped a steep penalty of Rs 1,337.76 crore on Google 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.

The regulator, which has passed the order after ordering a detailed probe more than three years ago, has also directed Google to modify its conduct within a defined timeline, according to a release.

Android is a popular open-source, mobile operating system installed by Original Equipment Manufacturers (OEMs) of smartphones and tablets.

CCI, which had started probing the case in April 2019, has directed that OEMs should not be restrained from choosing from amongst Google’s proprietary applications to be pre-installed and also not be forced to pre-install a bouquet of applications on their smart devices.

In the release, the regulator said it has imposed a penalty of Rs 1,337.76 crore on Google for abusing its dominant position in multiple markets in the Android mobile device ecosystem, apart from issuing the cease and desist order.

There was no immediate comment from Google on the Competition Commission of India (CCI) order.

Google has been under the regulatory lens of CCI, which is currently also looking into few other cases related to the internet major.

Matters pertaining to alleged anti-competitive practices by Google with respect to news content, smart TV and GPay are also before the regulator.

In February 2018, the regulator imposed a fine of Rs 136 crore on Google for unfair business practices in the Indian market for online search.

CCI, on Thursday, said the public version of the order would be uploaded on the regulator’s website on Friday. CCI Chairperson Ashok Kumar Gupta will be retiring on October 25 and the latest Google ruling is the second major one in as many days.

On Wednesday, the watchdog had slapped penalties totalling Rs 392 crore on MakeMyTrip, Goibibo and OYO for unfair business practices.

For the current case, CCI considered five relevant markets in India. They are the markets for licensable OS for smart mobile devices, app store for Android smart mobile OS, general web search services, non-OS specific mobile web browsers and Online Video Hosting Platform (OVHP).

In April 2019, the regulator ordered a detailed probe in the matter following complaints by consumers of Android-based smartphones in the country. The allegations of unfair business practices pertained to two agreements — Mobile Application Distribution Agreement (MADA) and Anti Fragmentation Agreement (AFA) — which were entered into by the OEMs of Android OS with Google.

CCI said that mandatory pre-installation of entire Google Mobile Suite (GMS) under MADA, with no option to un-install the same, and their prominent placement amounts to imposition of unfair condition on the device manufacturers and thereby contravenes competition law.

In a raft of directions, the watchdog said that OEMs should also not be forced in deciding the placement of pre-installed apps on their smart devices.

Licensing of Play Store, including Google Play Services, to OEMs should not be linked with the requirement of pre-installing Google search services, Chrome browser, YouTube, Google Maps, Gmail or any other application of Google, the release said.

”Google shall not offer any monetary/ other incentives to, or enter into any arrangement with, OEMs for ensuring exclusivity for its search services,” it added.

Among others, CCI said Google should not restrict un-installing of its pre-installed apps by the users.

”Google shall allow the users, during the initial device setup, to choose their default search engine for all search entry points. Users should have the flexibility to easily set as well as easily change the default settings in their devices, in minimum steps possible,” the release said.