Were the tech giants engaging in anti-competitive practices through their Play Store policies? How was the earlier fine related to the Android mobile device ecosystem? How has the Alphabet-owned company reacted to the second penalty in a week?
Were the tech giants engaging in anti-competitive practices through their Play Store policies? How was the earlier fine related to the Android mobile device ecosystem? How has the Alphabet-owned company reacted to the second penalty in a week?
the story So Far: Second blow to Google’s coffers in a week, Competition Commission of India (CCI) on 25 October ₹936.44 crore fined On the tech major for anti-competitive practices in its Play Store policies. on 20 October, CCI had imposed a provisional penalty of ₹1,337.76 crore On the company for abusing its dominant position in multiple markets in the Android mobile device ecosystem.
Why has Google been fined for the second time?
The new fine by the CCI pertains to one of the three antitrust lawsuits being faced by Google in India. An investigation into Google’s payment system used in the Play Store began in 2020 after an individual complainant, whose identity has been kept confidential, filed an antitrust case against Google, Indian startups and small digital companies have complained about Google’s policy of imposing the use of its payment system on app developers. A similar investigation is on against Google. South Korea and Indonesia. a A European court recently upheld a 2018 ruling against Google It said that the company imposed “unlawful restrictions on manufacturers of Android mobile devices”. Google has been fined $4.1 billion and plans to appeal.
The Google Play Store is a marketplace for apps and services and has a collection of over 3 million applications. In the current case involving Google, the CCI examined whether the company compulsorily asked app developers to use Google Play’s billing system (GPBS) to not only receive payment for paid app downloads, but also Violated the Competition Act through its policy for in-app purchases. , The investigation also found that if app developers do not follow Google’s policy of using GPBS, they will not be allowed to list their apps on the Play Store. The CCI thus concluded that accessing the Play Store contingent on the mandatory use of GPBS was “unilateral and arbitrary” and also denied app developers “the built-in option to use the payment processor”.[s] of their choice from the open market. ,
It also examined the service charges that Google charges for developers of paid apps and for in-app purchases. Compared to 0-3% charges by other payment aggregators in India, the Commission found that Google’s service charges (between 15-30%) are exorbitant, unfair and discriminatory.
Google submitted that only 3% of developers on Google Play are subject to service fees. However, the Commission found that the services provided by Google to these developers are no different or additional than those provided to developers of free apps. Further, it was found that Google does not make it mandatory for some of its apps such as YouTube to use GPBS, exempting them from paying service charges. In addition, the commission said that Google has excluded rival UPI apps as effective payment options on the Play Store. It noted that it was discriminatory for Google to use an easy and efficient payment flow for its own UPI application, GPay, while using a more cumbersome system with lower success rates for other UPI apps like Paytm, PhonePe etc. The watchdog recorded that while JioPay did not lead the overall UPI market in India, it was the dominant player in UPI payments made on the Google Play Store.
The watchdog has directed Google to allow app developers to use any third-party billing service and gave it three months to implement necessary changes to its practices.
What are some of the major findings?
The current investigation has found that Google has a dominant position in the licenseable operating system (OS) market. OSes are complex software products that are needed to run applications and programs on a smartphone. Android, the most prominent OS, was acquired by Google in 2005. Android is a licensable OS, which means developer Google licenses it to smartphone makers like Samsung, Vivo, and the like.
According to research by Counterpoint, 97 percent of India’s 600 million smartphones are powered by Google’s Android OS. While Android is a theoretical open-source OS, the CCI found that it is controlled by Google. The commission noted that through its restrictive agreements with smartphone makers, Google has ensured that manufacturers who wish to use its proprietary apps, such as Chrome, the Play Store, YouTube, have to use Google’s version of Android. Will happen.
CCI also concluded that Google Play Store is the largest app store in terms of users, availability of apps and developers as compared to other app stores. The order states that Play Store, which is a part of Google suite (Chrome, Gmail, YouTube etc.), comes pre-installed in 100% of Android OS devices and due to mandatory pre-installation and entry barriers in the market. Is. As of now, users did not have the option of side-loading or downloading apps outside of the Play Store.
How has Google responded?
While Google called last week’s ₹1,300-crore fine a “major setback” for its Indian operations, it defended itself after the second penalty, saying “Indian developers love technology, security, consumer safety and unmatched choice”. and have benefited from the flexibility that Android and Google Play provide”. It said its low-cost model has driven India’s “digital transformation” and expanded its “reach to millions of Indians”.
was told that Google is also planning a legal challenge In response to the first no-confidence decision by the CCI.
essence:
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Competition Commission of India (CCI) on 25 October ₹936.44 crore fined For anti-competitive practices in its Play Store policies at Google. on 20 October, CCI had imposed a provisional penalty of ₹1,337.76 crore On the company for abusing its dominant position in multiple markets in the Android mobile device ecosystem
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The Google Play Store is a marketplace for apps and services and has a collection of over 3 million applications. In the current case involving Google, the CCI examined whether the company compulsorily asked app developers to use Google Play’s billing system (GPBS) to not only receive payment for paid app downloads, but also Violated the Competition Act through its policy for in-app purchases. ,
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Google submitted that only 3% of developers on Google Play are subject to service fees. However, the Commission found that the services provided by Google to these developers are no different or additional than those provided to developers of free apps.