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Google abusing position, playing unfair: CCI probe
During the two-year investigation, ordered by CCI in April 2019, the panel questioned Google – the leader of the dominant and ubiquitous Android operating system (OS) with nearly 98% of the smartphone market – and multiple multi-national and Indian companies such as Apple, Microsoft, Amazon, Paytm, PhonePe, Mozilla, Samsung, Xiaomi, Vivo, Oppo and Karbonn.
The probe found Google India guilty of stifling competition and innovation to the detriment of the market as well as consumers in order to maintain its grip and dominance in search, music (through YouTube), browser (chrome), app library (Play Store) and other key services. The investigation report, which runs into nearly 750 pages, was reviewed exclusively by TOI.
The probe accuses Google of imposing and forcing one-sided contracts on devices as well as app makers to ensure that its own products and apps maintain primacy in consumer usage, and come pre-installed and as default options to get the highest user preference.
“Google is found to be contravening the provisions of Section 4(2)(a)(i); Section 4(2)(b); Section 4(2)(c); Section 4(2)(d) and Section 4(2)(e) of the Competition Act,” the probe report summed up, holding the company guilty of a variety of charges, including abuse of dominance, denial of market access to competitors, and limiting and restricting technical or scientific development relating to goods or services to the prejudice of consumers.
The report has been placed before the CCI for consideration and if found guilty, Google could face penalties or be asked to discontinue practices that are seen to distort competition and are anti-consumer based on market dominance.
Google has faced and is facing antitrust investigations in various parts of the globe – from the US to the European Union, Germany and Japan.
The Indian investigation looked into a variety of issues after CCI first received a complaint alleging that Google India had hindered the development and market access of rival mobile apps or services by requiring smartphone and tablet manufacturers through certain exclusive deals to pre-install its proprietary apps and /or services. Based on its own exclusive terms, the company offered its coveted Google Mobile Services (GMS) suite with popular products as a bundle, and this included Google Play Store, search app, YouTube, and Chrome browser.
A device-maker wanting to go beyond the “bare Android version” and to make use of any of the key Google apps is mandated by Google to sign a Mobile Application Distribution Agreement (MADA) and further an Anti-Fragmentation Agreement (AFA)/Android Compatibility Commitment (ACC), which requires pre-loading of Google apps and a predetermined placement for them on the devices.
Also, device manufacturers and other partners are offered lucrative revenue-share agreements – including top player Apple for search engine option for its Safari browser – so that they give primacy to a Google-only ecosystem of apps and services.
In the search engines category, which is the tech giant’s primary business, the CCI probe found that Google has been “foreclosing competition” in the Android operating system as through MADA, the search widget is placed on the default home screen of devices and Chrome browser inserted in a folder of Google apps. “Competing general search services cannot offset the competitive advantage that Google ensures for itself through pre-installation and thus, acting as an entry barrier for competitors,” the investigation noted.
With Google controlling nearly all of the smart mobile market in India through Android, this further helps it dominate the search market as it gets access to swathes of user data that makes its results sharper, the report said.