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India fines Google $162 million for abusing Android monopoly
That's a whole six hours of revenue, but requirements to open the Android ecosystem will hit harder
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 fine comes after the Commission probed the local markets for mobile device operating systems, app stores accessible from within Android, web search services, non-OS specific mobile web browsers, and online video hosting platforms.
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.
Interestingly, the Commission (CIC) noted that in its defence, Google argued that Apple is a strong competitor. Yet Apple's market share in India is tiny compared to its presence elsewhere – its products are priced out of reach of most Indian residents. Smartphones using Android hold over 84 percent of the market when just the five best-selling handset brands are considered. Analysts feel Apple may have recently crawled past five percent market share – well behind the almost 50 percent of the market it holds in the USA or 20 percent across Europe.
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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 Register has sought comment from Google but has not received a response at the time of publication. ®