Protecting competition – on CCI penalty on Google

Source: The post is based on an article “Protecting competition” published in Business Standard on 27^th October 2022.

Syllabus: GS 2 – Governance

Relevance: fines imposed on Google by CCI

News: The Competition Commission of India (CCI) has imposed two fines within seven days on Google.

What were the reasons behind imposing fine?

Fines were imposed for two reasons – a) misusing its dominant position in multiple categories related to the Android ecosystem, b) misusing its dominant market position with respect to its Play Store policies.

Multiple Categories: As per CCI, Google misused its position in the multiple categories that include misuse of android operating system, android apps, monopoly market share in search, etc.

Play Store Policies: Google made it mandatory to use Google Play Billing System (GPBS) for paid apps and in-app purchases for app developers which is termed as unfair practices by CCI. The failure to comply with using GBPS would not permit app developers to list on Play Store.

Further, as per CCI, Google discriminated in favor of YouTube by not requiring GPBS for it and it also integrated GPay to its Play Store that gave unfair advantage to its own UPI app.

Moreover, Google entered Mobile Application Distribution Agreements (MADA) with mobile manufacturers to ensure Google’s apps are pre-installed.

It gave a competitive edge to Chrome browser and YouTube and helped google to secure its exclusive position in online search.

These were the reasons for imposing fine on Google and CCI has also directed google to take certain steps.

What are the directions issued by CCI to Google?

It has stopped Google from forcing manufacturers to pre-install its applications and it has been prohibited to offer any monetary incentive or to enter into any arrangement for search exclusivity.

CCI also directed google to allow app developers to use third-party billing/payment processing services. This would ensure proper level playing field amongst the payment providers.

Google has been asked to come up with transparent policy on the data collected, use of data and also potential and actual sharing of data with other entities. It has also been directed that data collected through GPBS should not be misused.

Google is also instructed to not discriminate against apps providing payment through UPI apps other than GPay.