Google Says It Will 'Review' CCI Fine, Calls Order 'Major Setback' For Consumers In India

Google faces a Rs 1,338 crore penalty from CCI over anti-competitive practices.

Google has issued a response to the Competition Commission of India (CCI) order of imposing a penalty of nearly Rs 1,338 crore over anti-competitive practices. The tech giant said that it will review the CCI order, claiming that the decision is a 'major setback for Indian consumers', reports PTI.

The CCI on Thursday slapped the abovementioned fine on Google for abusing its dominant position in several markets in the Android ecosystem. Google has also been directed to cease and desist unfair business practices and 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.

The regulator in 2019 ordered a detailed probe into the matter following complaints by consumers of Android-based smartphones in the country.

For those unaware, Android is an open-source, mobile operating system installed by original equipment manufacturers (OEMs) on 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 rival 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.

CCI added, "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."