Competition watchdog directs Google to allow side-loading of Android apps and distribution of rival app stores using PlayStore

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The Competition Commission of India (CCI) on Thursday imposed a penalty of Rs 1,337.76 crore on Google for allegedly abusing its dominant position in the Android mobile device ecosystem. CCI concluded that Google violated Section 4 of the Competition Act, 2002 prohibiting the abuse of a “dominant position” in the market.

Responding to a complaint in 2018, the CCI in April 2019 formed a prima facie view that Google has contravened various provisions of Section 4 of the Act and directed the Director General to cause an investigation.

Concluding the three-year+ procedure, the CCI now issued cease and desist order against Google, asking it to refrain from unfair business practices, and directed the tech giant to modify its conduct within a defined timeline. The investigation pertains to the following relevant markets:

  • Market for licensable OS for smart mobile devices in India
  • Market for app store for Android smart mobile OS in India
  • Market for general web search services in India
  • Market for non-OS specific mobile web browsers in India
  • Market for online video hosting platform (OVHP) in India.

The commission said it imposed the fine as Google allegedly abused its dominant position in all five markets.  “Based on the above analysis of the market share data, it is noted that the market of licensable smart mobile device (smartphones & tablets) OS, is heavily concentrated in favour of Google’s Android due to its dominant, persistent and increasing share in the domestic market,” the public version of the report read.

The CCI has now concluded that mandatory pre-installation of entire Google Mobile Suite (GMS) under mobile application and distribution agreement (MADA), with no option to uninstall it, and its prominent placement amounts to imposition of unfair conditions on device manufacturers and, hence, contravenes provisions of Section 4(2)(a)(i) of the Competition Act, which deals with abuse of dominant position.

The CCI has recommended that original equipment manufacturers (OEMs) should not be restrained from choosing from amongst Google’s proprietary applications to be pre-installed, shouldn’t be forced to pre-install a bouquet of applications, and should be allowed to decide on the placement of pre-installed apps on their smart devices.

In its defence, Google cited the competition it faced from Apple. On this count, the CCI noted: “Apple’s business is primarily based on a vertically integrated smart device ecosystem which focuses on sale of high-end smart devices with state of the art software components. Whereas Google’s business was found to be driven by the ultimate intent of increasing users on its platforms so that they interact with its revenue earning service i.e., online search which directly affects sale of online advertising services by Google.”

It is noteworthy that WinZO, a Delhi based social gaming platform has recently filed two cases against Google for discriminatory policies pertaining to side loading of apps using apk files and the recent pilot of allowing rummy and fantasy apps on PlayStore at the exclusion of other real money games. These cases are pending before the Delhi High Court (Delhi HC).

On the side loading restriction, the CCI directed Google to not restrict the ability of app developers, in any manner, to distribute their apps through side-loading. Out of PlayStore, real money gaming apps use side-loading to distribute their apps. With the CCI direction, the pending cases filed by WinZO before the Delhi HC could be impacted.