Google Vs CCI: What has transpired so far & how it will affect Indian app makers

Google has appealed the CCi's order with the NCLAT and the Supreme Court. While both have refused to grant an interim relief in Google’s favour, they have not commented on the merits of the CCI order. (Image Source: Reuters)

Google has appealed against Competition Commission of India’s (CCI) order holding that it abused its dominant position in the Android ecosystem by imposing unfair conditions on device manufacturers. Such practices include asking the manufacturers to install the entire Google suite (G-suite), if they wish to pre-install Google apps in devices.

While both the Supreme Court (SC) and the National Company Law Appellate Tribunal (NCLAT) have refused to grant an interim relief in Google’s favour, they have not commented on the merits of the CCI order.

Why did CCI penalise Google?

In 2018, Android users alleged before CCI that Google was abusing its dominant position in the mobile operating system-related market in contravention of the provisions of the Competition Act, 2022.

It was alleged that asking device manufacturers to pre-install the entire Google Mobile Services (GMS) suite under its Mobile Application Distribution Agreement (MADA) is an unfair condition. The GMS suite includes apps such as Chrome, Gmail, search, and others.

In October last year, the CCI, based on the investigation report by the Director General (DG) and other documents filed by both sides, concluded that Google was indeed abusing its dominant position in multiple markets in the Android mobile device ecosystem and ordered the company to pay a penalty of Rs 1,337.76 crore. CCI held that Google can neither force Original Equipment Manufacturers (OEMs) of smart devices to pre-install its apps nor restrict users from uninstalling such apps.

What is MADA?

MADA, according to Google, is a voluntary agreement with the device manufacturers, who wish to provide Android as the operating system in their phones. If MADA is signed, the OEMs will have to pre-install the entire G-suite and cannot pick and choose apps from the suite.

What happened in the appeals?

Google appealed against CCI’s order first at the NCLAT. The tribunal refused to stay CCI’s order and fixed the case for hearing in April 2023. Unhappy with this order, Google approached India’s Supreme Court.

At the SC, Google argued that CCI’s order was unfair on the following grounds:

- Android is an open source system with over 15,000 models, 1,500 device manufacturers and 500 million devices just in India

- MADA is a voluntary agreement between Google and device manufacturers to enhance the user experience, and so, it was not imposing any unfair conditions

- Changing the Android ecosystem after almost 15 years will increase the cost of devices.

The CCI countered Google’s argument by stating:

- MADA deprives consumers of choice to choose non-Google apps, thereby not allowing other apps with similar or better features to grow

- MADA is not free or voluntary as marketability of the devices come down significantly if these apps do not feature in them

- Pre-installation of apps creates a behavioural bias and Google uses it for marketing.

The Chief Justice of India remarked, “Look at the kind of authority in terms of dominance that you wield with so many models, manufacturers and users. With this kind of penetration, you insist on your bouquet of apps?” The court however, did not pass any orders on the merits of the case.

The SC has asked the NCLAT to complete hearing the case by March 31, 2023.

How will Indian app makers benefit if the CCI ruling is implemented?

Moneycontrol spoke to stakeholders from the Indian app ecosystem on how the CCI’s ruling will affect them. They feel that the ruling has the potential to change the way apps are built in India.

Value addition to Indian apps

MapmyIndia is an Indian technology company that builds digital map data, telematics services, location-based SaaS and GIS AI technologies. Despite having been established in 1995, and offering its consumer a mapping app since 2004, the company has a market share in the consumer maps app space of just 0.5 percent in India.

Rohan Verma, CEO and Executive Director of the company, feels that despite having the first mover advantage and offering far better features, Google’s anti-competitive practice in its Android ecosystem, foreclosed rivals such as MapmyIndia, thus harming Indian consumers’ ability to choose. He said, “CCI findings show how Indian indigenous apps have been suppressed, and that is the reason most Indians haven’t been able to access and use the better, more local Indian apps, leading to Indians not being able to appreciate and benefit from the value of Indians app.”

On being asked if the ruling will enable more app developers to develop apps with similar functionality as Google’s app, he said “We hope this is the start of a change in momentum from the last 15 years, Indians and the Indian ecosystem can prosper far more than they were able to thus far.”

Will democratise access

Rameesh Kailasam is the President & CEO of IndiaTech.org, a think tank and industry group set up by Indian start-up founders and funds for supporting internet-based start-ups. He opined that after the introduction of a G-suite in the Android ecosystem, other players were almost ousted from the market ecosystem due limitation of access. He said, “The ones who developed similar apps could not penetrate the market due to lack of democratisation of access and comfort zones that got created around the operating system for developers.”

He feels Indian consumers have not been given a choice to use locally-developed apps. However, if the CCI order passes muster at NCLAT and the SC, a fillip will be given to the Indian app making ecosystem to create services which may be better, and in due time, become a go-to app.

Kailasam said, “Once there is democratisation of access, more developers may build apps with the same or even superior functionalities as Google. Right now due to bundling, choices are limited to use other apps. If the order is implemented in letter and spirit, users’ choices and comfort will decide on future evolution and usage, but for that to happen there must be choice, freedom and access.”

Also Read| Google versus the antitrust watchdog: the saga so far