India’s Competition Commission has announced it will fine Google ₹1,337.76 crore (₹13,377,600,000 or $161.5 million) for abusing its dominant position in multiple markets in the Android Mobile device ecosystem and ordered the company to open the Android ecosystem to competition
The Commission found Google was dominant in all five markets and worked to preserve that position with instruments such as the Mobile Application Distribution Agreement (MADA) that required Android licensees to include Google’s apps.
“MADA assured that the most prominent search entry points – i.e., search app, widget and Chrome browser – are pre-installed on Android devices, which accorded significant competitive edge to Google’s search services over its competitors,” the CIC found. Google’s policies also gave the company “significant competitive edge over its competitors” for its own apps such as YouTube on Android devices.
The CIC offered the following assessment of how Google’s actions impacted the market:
The competitors of these services could never avail the same level of market access which Google secured and embedded for itself through MADA. Network effects, coupled with status quo bias, create significant entry barriers for competitors of Google to enter or operate in the concerned markets.
For those and many other reasons, the CIC decided Google was on the wrong side of India’s Competition Act. In addition to the abovementioned fine, it imposed a cease and desist order on Google that requires it to change some of its business practices to do things such as:
- Allowing third—party app stores to be sold on Google Play;
- Allowing side-loading of apps;
- Giving users choice of default search engine other than Google when setting up a device;
- Ceasing payments to handset makers to secure search exclusivity;
- Not denying access to Android APIs to developers who build apps that run on Android forks.
Some of the above are measures that other competition regulators around the world have contemplated, but not implemented.
So while India’s fine is a quarter of a day worth of Google’s $256 billion annual revenue and therefore a pin-prick, the tiny wound could become infected if other regulators decide to poke around.
The size of the fine was probably pretty well thought out too 🙂