The recent order of India’s competition regulator against Google for abusing its dominant position in the Android mobile device ecosystem is significant not just for the amount of penalty imposed but also for the drastic changes in business practices that it requires the IT giant to undertake. On Thursday, the Competition Commission of India imposed a penalty of about ₹1,337 crore, said to be a provisional amount, on Google, while coming down heavily on it for having such restrictive clauses in its agreements with original equipment manufacturers (who use its Android platform) that it can keep competition at bay. And because of such agreements, the order said, “Google ensured that users continue to use its search services on mobile devices which facilitated un-interrupted growth of advertisement revenue for Google.” It, therefore, concluded that the whole idea of Google imposing such restrictions on its device partners was to “protect and strengthen its dominant position in general search services and thus, its revenues via search advertisements”. This decision, both the penalty and the regulator’s direction to Google “to modify its conduct”, will be welcomed by anyone who realises the power of the big IT platforms to shut out competition and, therefore, choice for the users.
Significantly, it will not be business-as-usual for Google, as the regulator has issued a cease and desist order against it, according to which it will have to drastically change the terms of the deals it enters into with original equipment manufacturers. For instance, as per the Competition Commission order, Google should not henceforth force original equipment manufacturers to choose from its bouquet of apps to pre-install on the device. Nor should it, the order says, require device makers to pre-install its apps such as Google search, Chrome, YouTube, Maps, among others, as a precondition for licensing of its Play Store. It also has been directed against restricting users from uninstalling its pre-installed apps. One of the requirements, in fact, targets Google’s primary revenue generator. It says, “Google shall allow the users, during the initial device setup, to choose their default search engine for all search entry points.” These, among a slew of such requirements, could well mean that Google will have to tweak its business model in India. Google has termed the order a “major setback” for Indian businesses and consumers, saying it opens up security risks while also possibly raising the cost of mobile devices. While the option of legal review is open, it is to the regulator’s credit that Google’s anti-competitive practices have been called out. What the mobile users of a potential digital powerhouse such as India need is an environment of real choice.
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