Google fined Rs 1,337 crore in India for unfair practices: pre-installed Google Search, Chrome, YouTube on Android among charges

The Competition Commission of India (CCI) has imposed a penalty of Rs 1337.76 crore on Google for anti-competition practices and “abusing its dominant position” in multiple markets in the Android Mobile device ecosystem. Additionally, CCI has also issued a cease and desist order, which directs Google to stop malpractices and modify its conduct within a defined timeline.

CCI says it has examined various practices of Google with respect to licensing of its Android mobile operating system and various proprietary mobile applications of Google like Play Store, Google Search, Google Chrome, YouTube, and more. CCI has alleged Google of unfair practices by giving a competitive edge to its proprietary apps like Search, Chrome and YouTube, which come pre-installed on Android devices. Google is yet to respond to the issue.

Google fined in India for unfair practices

The Competition Commission of India says that during the course of the inquiry, Google argued about the competitive constraints between the latter’s Android eco-system and Apple’s iOS ecosystem. However, CCI noted the differences between the two business models, which is said to have affected 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. While Google’s business was found to be driven by the intent of increasing users on its platforms so that they interact with its revenue-earning service i.e., an online search which directly affects the sale of online advertising services by Google.

Google operates/manages the Android OS as well as licences other proprietary applications and OEMs to use this OS and Google’s apps in their smart mobile devices. They enter into multiple agreements to govern their rights and obligations viz. Mobile Application Distribution Agreement (MADA), Anti-fragmentation Agreement (AFA), Android Compatibility Commitment Agreement (ACC), Revenue Sharing Agreement (RSA), etc.

Mobile Application Distribution Agreement (MADA) ensured that the most prominent search entry points i.e, search app, widgets and Chrome browser are pre-installed on Android devices, which accorded a significant competitive edge to Google’s search services over the competition. Google also has an edge over the competition, in relation to its other revenue-earning app i.e YouTube on Android devices.

The competition never had a chance to withstand these services, says CCI.

The Commission imposed some measures such as:

OEMs shall not be restrained from choosing Google’s proprietary applications to be pre-installed and should not be forced to pre-install a bouquet of applications, deciding the placement of pre-installed apps, on their smart devices.
Licensing of Play Store to OEMs shall 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 search engine giant shall not deny access to its Play Services APIs to disadvantage OEMs, app developers and its existing or potential competitors.
Google shall not offer any monetary/ other incentives to or enter into any arrangement with, OEMs.
Google shall not impose anti-fragmentation obligations on OEMs, as presently being done under AFA/ ACC.
Google shall not incentivise or otherwise obligate OEMs for not selling smart devices based on Android forks.
Google shall not restrict uninstalling 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.
Google shall allow the developers of app stores to distribute their app stores through the Play Store
Google shall not restrict the ability of app developers to distribute their apps through side-loading.

Google has been given 30 days to provide the requisite financial details and supporting documents. The company is yet to release an official statement on this.