Google has reportedly abused the dominant position of its Android operating system in India, using its “huge financial muscle” to illegally hurt competitors, according to Competition Commission of India’s (CCI) investigations unit.
In 2019, the CCI opened a probe into whether Google abused Android’s dominance in the market where devices powered by the OS are prevalent. In its report on the probe’s findings, the regulator wrote that Google flexed its “huge financial muscle” to reduce manufacturers’ ability to develop and sell devices running Android forks.
The antitrust regulator said Google appeared to have leveraged its dominance to reduce device makers’ ability to opt for alternate versions of its mobile operating system and force them to pre-install Google apps.
The 750-page report finds the mandatory pre-installation of apps “amounts to imposition of unfair condition on the device manufacturers” in violation of India’s competition law, while the company leveraged the position of its Play Store app store to protect its dominance.
The regulator also found Play Store policies to be “one-sided, ambiguous, vague, biased and arbitrary.” In a statement sent to Reuters, Google said it’s looking forward to working with the CCI to “demonstrate how Android has led to more competition and innovation, not less.”
Google submitted at least 24 responses during the probe, defending itself and arguing it was not hurting competition. Other tech companies including Microsoft, Amazon, Apple, Samsung and Xiaomi also responded to questions from the commission.
While CCI still decided that Google illegally stifled competition in the country, the company will have another chance to defend itself before the CCI issues its final decision along with penalties, if any.
Its findings are the latest antitrust setback for Google in India, where it faces several probes in the payments app and smart television markets. The company has been investigated in Europe and the US.
Just a few days ago, South Korean regulators also came to the decision that Google used its dominant position in the market to hamper the development of Android rivals. They slapped the tech giant with a $180 million fine. They also banned the company from requiring manufacturing partners to sign anti-fragmentation agreements, which prohibit the creation and installation of alternative versions of the Android OS.
The Alliance of Digital India Foundation (ADIF), a body that represents over 350 digital startups, has been constantly urging the government to enact legislation to curb the dominance of technology giants like Google and Apple.
According to ADIF, globally, Apple and Google control more than 95 percent of the app store market share through iOS and Android, respectively. The abuse of dominance by these market leaders through a high margin rate of 30%-35% of in-app purchases (IAP) is a concern globally.
Though many startups have been able to reach global audiences due to these market service providers, it is hard to comply if Google and Apple deliberate higher fees or refuses to list created content, it noted.
India remains a key growth market for Google and Android powers 98% of India’s 520 million smartphones, according to Counterpoint Research. The tech giant said last year it would spend $10 billion in the country over five to seven years through equity investments and tie-ups, its biggest commitment to a key growth market.
It’s still early days in the app ecosystem and the implications of the move in the Indian market (and other markets) remain to be seen. Moreover, Google Play Store and App Store will continue to exist, but experts believe a healthy market competition will make the digital payment system more robust and fair.