CCI fines Rs 1,337.76 cr penalty on Google for unfair biz practices in Android mobile ecosystem

New Delhi, Oct 20: The Competition Commission of India (CCI) on Thursday imposed a fine of Rs 1,337.76 crore on search giant Google for 'abusing its dominant position' in the Android Mobile device ecosystem, apart from issuing cease and desist order. The CCI also directed Google to modify its conduct within a defined timeline.

Smart mobile devices need an operating system (OS) to run applications (apps) and programs. Android is one such mobile operating systems which was acquired by Google in 2005.

The CCI in the instant matter has examined various practices of Google w.r.t. licensing of this Android mobile operating system and various proprietary mobile applications of Google (e.g. Play Store, Google Search, Google Chrome, YouTube, etc.).

In a release, the Competition Commission of India (CCI) said it has also directed Google to modify its conduct within a defined timeline.

In April 2019, the regulator ordered a detailed probe in the matter following complaints by consumers of Android-based smartphones in the country. Android is an open-source, mobile operating system installed by Original Equipment Manufacturers (OEMs) of smartphones and tablets.

The allegations of unfair business practices pertained to two agreements -- Mobile Application Distribution Agreement (MADA) and Anti Fragmentation Agreement (AFA) -- which were entered into by the OEMs of Android OS with Google as reported by news agency PTI.

In the release, the regulator said it has imposed a penalty of Rs 1,337.76 crore on Google for abusing its dominant position in multiple markets in the Android mobile device ecosystem apart from issuing the cease and desist order.

As per the release, CCI said that mandatory pre-installation of entire Google Mobile Suite (GMS) under MADA, with no option to un-install the same, and their prominent placement amounts to imposition of unfair condition on the device manufacturers and thereby contravenes competition law.

''These obligations are also found to be in the nature of supplementary obligations imposed by Google on OEMs and thus, in contravention of Section 4(2)(d) of the Act,'' it added.

Section 4 of the Competition Act pertains to abuse of dominant position.

Google has perpetuated its dominant position in the online search market resulting in denial of market access for competing search apps. Also, it has leveraged its dominant position in the app store market for Android OS to protect its position in online general search which violates the competition law.

Further, CCI noted that the internet major has leveraged its dominant position in the app store market for Android OS to enter as well as protect its position in non-OS specific web browser market through Google Chrome App.

''Google has leveraged its dominant position in the app store market for Android OS to enter as well as protect its position in Online Video Hosting Platforms (OVHPs) market through YouTube and thereby contravened provisions of Section 4(2)(e) of the Act,'' the release said.

(with PTI inputs)