Google fined by CCI for anti-competitive practices on Android: A look at what it says

“Android has created more choice for everyone, and supports thousands of successful businesses in India and around the world. The CCI’s decision is a major setback for Indian consumers and businesses, opening serious security risks for Indians who trust Android’s security features, and raising the cost of mobile devices for Indians. We will review the decision to evaluate next steps,” Google said in a statement.

As we’ve noted in our explained article, CCI’s order assumes significance given Google is also facing similar anti-trust concerns in other countries. It is also facing other cases in India as well. Here’s a look at the key points of the order.

No mandatory pre-loading of Google apps

One key part of the CCI order is that it wants Google to stop the mandatory pre-installation of the entire Google Mobile Suite on smartphones under its Mobile Application Distribution Agreement (MADA) that its signs with Original Equipment Manufacturers (OEMs). The CCI noted in the press release that this sort of placement is unfair to “device manufacturers” and anti-competitive in nature.

The order adds that OEMs cannot be forced to decide the placement of these pre-installed Google apps, they cannot be stopped from choosing which apps to pre-installed and they should not be “forced to pre-install a bouquet of applications.” Typically most Android phones in India come with a dedicated folder of Google’s top apps from Gmail to Chrome to the Play Store to even Google Pay. It seems Google can no longer ensure this is mandatory for OEMs in order to get the Android license.

Cannot restrict users from un-installing its apps, choosing other search engine options

The order also notes that Google cannot stop users from uninstalling its pre-installed apps nor can it stop them from choosing their default search engine at the time of device setup. Right now, Google Search is the default option on Android phones, but these order states users should be allowed to change this. “Users should have the flexibility to easily set as well as easily change the default settings in their devices, in minimum steps possible,” it notes.

Allow other App Stores

This provision is something that other app developers have long asked for. Google can no longer stop developers from distributing their app stores through Play Store. This is a significant move because so far Google does not allow other app stores to appear on its Play Store. Further, Google cannot “restrict the ability of app developers, in any manner, to distribute their apps through side-loading,” according to the press release by CCI.

While side-loading takes place quite commonly on Android, Google does warn users that it comes with security risks. Developers have long claimed that Google’s restrictions on app distribution policies end up limiting their ability to reach users. Further, with alternative app stores being allowed, some developers will be able to avoid Google’s 30 per cent tax for apps which have in-app purchases.

Can’t link license to Play Store

Google cannot link the license terms for Play Store (including Google Play Services) which is given to OEMs to any “requirement of pre-installing Google search services, Chrome browser, YouTube, Google Maps, Gmail or any other application of Google.” This means OEMs could soon release Android phones without these apps pre-installed on their devices.

Cannot deny access to Play Services APIs to others

Google is also restricted from denying “access to its Play Services APIs to disadvantage OEMs, app developers and its existing or potential competitors.” CCI’s order notes that this is done to ensure “interoperability of apps between Android OS which complies with Google’s compatibility requirements of Google and Android Forks.” This will allow “app developers would be able to port their apps easily onto Android forks,” according to CCI.

No special arrangements with any OEMs

The order also prohibits Google from offering “monetary/ other incentives” in order to enter into any arrangements with an OEM for “ensuring exclusivity for its search services.”

No substitutability between Google and Apple

The press release also notes that Google’s arguments that it faced “competitive constraints” from Apple had no merit. The Commission said that there was a difference in the two business models, noting that Apple is primarily focused on the sale of “high-smart devices with state-of-the-art software components,” while Google’s larger aim is to increase “users on its platforms” and help it earn ad revenue.

CCI said it found no merit to the argument that there is “substitutability between Google’s Play Store and Apple’s App Store,” and that while there might be some degree of competition between the two ecosystems, it is “limited at the time of deciding as to which device to buy.”

Google abused its position to dominate online market search, app store

The order also notes that Google has abused its position to dominate the online search market and the app store. It said it has denied market access to rival search apps and app stores as well as protected its position in the “non-OS specific web browser market through Google Chrome App” and thus violated several provisions in the law. It added that by making pre-installation of Google’s proprietary apps (particularly Google Play Store) conditional for signing agreements, Google violated the anti-trust law.