Explained | CCI’s ₹1,300 crore fine on Google and how that will change Android smartphones

How is the Alphabet owned company allegedly violating its position especially with regard to the Android mobile device ecosystem? Is this the first probe against Google in India?

The story so far: The Competition Commission of India (CCI) has imposed a provisional fine of ₹1,337.76 crore on Alphabet-owned Google for “abusing its dominant position” in markets related to the Android mobile device ecosystem.

The CCI, the country’s competition watchdog is empowered under the Competition Act, 2002, to check whether companies especially large tech companies are not eliminating healthy competition in the market and creating a monopoly.

The CCI’s current case in India has identified almost identical abuse of the Android ecosystem by Google as the European Union’s Competition watchdog did in 2018. The over $4 billion fine on Google imposed by the EU regulator was confirmed by the European Court this year along with most of the anti-competitive practices identified by the probe.

The current case by CCI against Google started in 2019 and since then the regulator has examined various practices of the tech giant with respect to various relevant markets.

The first is regarding the Android operating system (OS). Smartphones need an OS to run applications and programs and one of the most prominent operating systems is Android which was acquired by Google in 2005. According to Counterpoint research, 97% of India's 600 million smartphones are powered by Google’s Android OS. Google operates and manages the Android OS and licenses other Google proprietary applications such as Chrome and Play Store through it. Original Equipment Manufacturers (OEMs) or smartphone companies like Samsung then use this OS and through it, Google’s apps on their mobile phones.

Now, while the Android source code is openly accessible and covers the basic features of a smartphone, it does not include Google’s proprietary applications. To access and use these applications in their mobile handsets, manufacturers have to enter into agreements with Google that govern their rights and obligations such as the Mobile Application Distribution Agreement (MADA), Anti-fragmentation Agreement (AFA) etc. Android Compatibility Commitment Agreement (ACC), Revenue Sharing Agreement (RSA), etc.

The CCI held that through these restrictions in agreements Google made sure that the manufacturers who wished to use Google’s proprietary apps had to use Google’s version of Android.