The Competition Commission of India (CCI) on Thursday slapped a penalty of Rs 1337.76 crore on tech giant Google for abusing its dominant position in multiple markets in the Android mobile device ecosystem. The fair trade regulator has also directed the search engine giant to cease and desist from unfair business practices.
The Competition Commission of India, in a media release, said that it has also directed Google to modify its conduct within a defined timeline.
"Smart mobile devices need an operating system (OS) to run apps and programmes. Android OS is one such mobile operating system which was acquired by Google in 2005. The Commission in the instant matter has examined various practices of Google w.r.t. licensing of this Android mobile operating system and various proprietary mobile applications of Google (e.g. Play Store, Google Search, Google Chrome, YouTube, etc.)," the CCI said in the release.
In April 2019, the regulator ordered a detailed probe into the matter following complaints by consumers of Android-based smartphones in the country. Android is an open-source, mobile operating system installed by Original Equipment Manufacturers (OEMs) of smartphones and tablets. 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.
During the course of the inquiry, Google argued about the competitive constraints it faces from Cupertino-based tech giant Apple. In relation to understanding the extent of competition between Google’s Android ecosystem and Apple’s iOS ecosystem, the fair trade regulator noted the differences between the two business models which affect the underlying incentives of business decisions.
"Apple’s business is primarily based on a vertically integrated smart device ecosystem which focuses on the sale of high-end smart devices with state-of-the-art software components while Google’s business was found to be driven by the ultimate intent of increasing users on its platforms so that they interact with its revenue earning service i.e., online search which directly affects the sale of online advertising services by Google," the CCI release added.