NEW DELHI - Google has been compelled to loosen its monopolistic clutch on India, its largest Android user market, with changes that may have far-reaching implications for the tech giant’s business model in the country and beyond.
It announced a slew of fundamental changes on Wednesday to the way its mobile operating system works, after it was slapped with an antitrust order in October 2022 by the Competition Commission of India (CCI) for abusing its dominant position in the Android mobile devices market.
Around 97 per cent of more than 600 million smartphones in India run on Google’s Android operating system.
Google was fined over 13.37 billion rupees (S$215 million) and ordered to take corrective measures.
A key change will allow original equipment manufacturers (OEMs) to license individual Google apps for pre-installation on their devices, instead of forcing them to load the entire suite of Google products. Another important CCI directive will see users allowed to choose their default search engine when setting up a new Android device.
This climbdown comes after the Supreme Court last week refused Google’s appeal to block the CCI’s ruling.
The order has been welcomed by players in the country’s digital economy, which is projected to be worth US$800 billion (S$1.05 trillion) by 2030.
The Alliance of Digital India Foundation (AIDF), a think-tank for India’s digital start-ups, described the verdict as a “monumental step towards fair competition and practices in India”.
The order “could potentially embolden the start-up ecosystem in the country, boost innovation, and encourage smaller players to enter the market”, it said.
Dr Ritesh Malik, one of AIDF’s co-founders, told The Straits Times that Google’s practice of forcing OEMs to pre-install its bouquet of applications had marginalised competitors, harming innovation and consumer interest. “Google either purchased emerging players or used services such as bundling to nip competition in the bud... The recent order will allow app developers a level playing field in maps, video streaming, search platforms and mail services,” he said.
One of the many companies keenly tracking the outcome of this case is MapmyIndia. It launched its maps app in 2004, even before Google Maps began operations in the country around 2008.
But the firm’s first-mover advantage did not translate to a significant share of the consumer navigation app market given Google’s anti-competitive practices, said its CEO Rohan Verma.
Forcing Google Maps on Android smartphone users with no option of uninstalling it, and making them use its search services exclusively, which automatically direct location-related queries to Google Maps, effectively pushed MapmyIndia out of the consumer app market, he said.
“They gave prominence to their own product inside a search engine when search engines are meant to help people discover content organically,” Mr Verma told ST, adding that Google’s control of “gateways” to the Internet, such as its widely used operating system, browser, app store, digital advertising and app billing systems, had left the firm as well as Indian users “entrapped”.
“This level of control has made it pretty much impossible for MapmyIndia to grow our consumer app business,” he said.
Today, the firm has a share of just around 0.5 per cent of the B2C digital maps app market, with the rest amassed by Google Maps. The antitrust body’s decision, which Mr Verma said revealed Google’s unfair practices, left him “elated”.
From February, Google will allow developers to offer users an alternative billing system when purchasing in-app digital content. It will also make the process of downloading and updating apps from sources other than its Google Play Store more user-friendly.
Google will, however, “continue to respectfully appeal against certain aspects of the CCI’s decisions”. The top court has asked the National Company Law Appellate Tribunal to decide on the firm’s pending appeal by March 31.
The firm said the commission’s order “strikes a blow at... efforts to accelerate digital adoption” in India, arguing its directions would compromise online safety of users and make devices more expensive.
It told India’s top court that “no other jurisdiction has ever asked for such far-reaching changes”, Reuters reported in January.
The tech giant has been under growing scrutiny worldwide. On Jan 24, the US Justice Department and eight states filed a lawsuit against Google, claiming it illegally monopolises the online ads market.
In September 2022, Google lost its appeal against a record-breaking €4.125 billion (S$5.89 billion) antitrust penalty imposed by the EU for abusing its Android mobile operating system’s dominance.
Mr Prasanto Roy, a Delhi-based public policy consultant, said the CCI’s order “hits Google hard”, not due to the fine but because of its potential impact on Google’s business model and implications for the company in other jurisdictions.
“These are major changes ordered by the CCI, which could be seen by other regulators as a precedent and could hit Google revenues hard beyond India, especially on Play Store billing and search engine revenues,” he told ST.
Mr Roy added: “Google may actually want to consider implementing some of these changes beyond India, such as the search engine choice, in anticipation of regulatory action inspired by the case in India.”
