Explained | Why Google was fined 2.2K crore in a week

Days after it was fined Rs 1337.76 crore for related reasons, Google was slapped with a Rs 936.44 crore fine on Tuesday by the Competition Commission of India (CCI) for anti-competitive practices related to the Android ecosystem.

Google is no stranger to such penalties, having been fined by the European Union (EU) for similar reasons earlier.

According to Counterpoint Research, Android accounts for 97 per cent of the 600 million smartphones in India, making it Google’s biggest market by users.

What anti-competitive practices has Google been fined for?

The CCI had fined Google Rs 1,337.76 crore a week ago for abusing its dominant market position in the Android ecosystem, based on an investigation that the watchdog had started three-and-half years ago.

The investigation itself was based on a complaint that alleged that Google abused its position to make it mandatory for original equipment manufacturers (OEMs) to pre-install the Google Mobile Suite—its apps such as Search, Chrome, Maps, Play Store, Drive, Photos and YouTube among others—on their phones and place the apps in prominent positions.

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This, the CCI found, was an “imposition of unfair conditions on the device manufacturers” amounting to a “contravention of the provisions of Section 4(2)(a)(i) of the [Competition] Act, [2002]”, which states that there “shall be an abuse of dominant position...if an enterprise, directly or indirectly, imposes unfair or discriminatory condition in purchase or sale of goods or services.”

Why has Google been fined again?

The latest fine of Rs 936.44 crore, meanwhile, has been imposed on the search giant for abusing its position to promote its own payments app and in-app payments system on the Google Play Store.

The CCI noted that “Google’s Payments Policy requiring mandatory and exclusive use of GPBS [Google Play’s Billing System] denies the payment aggregators/payment gateways access to the market for processing of payments”, adding that “Google has excluded other UPI apps as effective payment option on the Google Play Store.”

“These practices distort competition and disturb innovation incentives as well as the ability of the app developers to undertake technical development and innovate in their respective sphere of business activities,” the CCI observed.

What has been Google’s response?

After the imposition of the first fine, Google had termed the CCI’s decision a “major setback for Indian consumers and businesses” that would open up “serious security risks for Indians who trust Android’s security features.”

The company had also said that the decision would raise the cost of mobile devices for Indians, adding that it would “review the decision to evaluate next steps”.

About the latest fine, the search giant argued that its model had “powered India’s digital transformation and expanded access for hundreds of millions of Indians” and that Indian developers had “benefited from the technology, security, consumer protections, and unrivalled choice and flexibility that Android and Google Play provide.”