One might not notice, but we are surrounded by google. If you are reading this article on a smartphone, it is probably on chrome. You reached this browser probably after receiving a link on a social media platform, owned by Google.
The tech giant received a major setback after a penalty of ₹1337.76 crore was imposed last Thursday by the Indian free trade body.
The Competition Commission of India has charged the MNC with ‘unfair business practices’ in the android devices market.
Google Abused its Dominant Position
It is basic knowledge that smartphones need an operating system to run apps and programmes, just like how your desktop requires Windows.
Android is one such OS, which is quite common in smartphones. It was acquired by Google in 2005. According to the website business of apps, Android has over 2.8 billion active users and controls a global market share of 75%.
According to the Press release by CCI, the tech giant dominates business by signing multiple agreements with Smartphone manufacturers.
“Accordingly, they enter into multiple agreements to govern their rights and obligations viz. Mobile Application Distribution Agreement (MADA), Anti-fragmentation Agreement (AFA), Android Compatibility Commitment Agreement (ACC), Revenue Sharing Agreement (RSA)”, said the press release.
MADA ensured that smartphone manufacturers — who wanted android for their devices — pre-install the google search app, widgets and chrome browser. Youtube — another high revenue earning app by Google — is already on android devices.
According to CCI, “the competitors of these services could never avail the same level of market access which Google secured and embedded for itself through MADA”.
Anti-fragmentation and Android Compatibility Commitment Agreements guarantee that distributing channels for competing search services is eliminated by prohibiting manufacturers from offering devices based on Android forks.
Now for those who are unaware, an Android fork is a modified version of the OS, or simply a non-google Android. CCI has accused Google that it ensured smartphone manufacturers are not able to develop and/ or offer devices based on forks.
Notably, the company was fined around $177 million in South Korea for restricting Android forks.
Meanwhile, Revenue Sharing Agreements helped the billion-dollar company in securing exclusivity for its search services while ensuring total exclusion of competitors.
According to CCI, “ With these agreements in place, the competitors never stood a chance to compete effectively with Google and ultimately these agreements resulted in foreclosing the market for them as well as eliminating choice for users”.
This is not the first instance when Google has been accused of unfair business practices.
In 2018, a European competition authority fined Google of 5.31 billion euros on charges of violating antitrust laws. The European agency accused Google of using its technology and dominance in the market to cement its leadership.
Google was also fined 500 million euros in France after it did not agree to a deal with news publishers. The tech giant is also facing problems in the USA, as several had complained about its monopolistic behaviour.
Just like several other online services, Google has become an indispensable part of our lives but monopoly is never healthy for business.