Explained: How Will The CCI Ruling Affect Google?

Numerous smartphones in India are powered by the Android operating system from Google. The tech giant was fined $161 million by the Competition Commission of India (CCI) in October 2022 for abusing its dominant position in the Android ecosystem. Google has now issued a warning that the antitrust order may endanger the expansion of the Android ecosystem.

The directive instructs the business to alter its platform marketing strategy in India. During its Supreme Court appeal, Google issued this caution. CCI even requested that restrictions on smartphone manufacturers' ability to pre-install apps be changed by the Alphabet Inc. owned business.

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How will the CCI decision affect Google?

Google previously asserted that its "long-standing business model" will need to change as a result of CCI's decision. However, the business outlined the changes required to comply with CCI's order in its Supreme Court filing, along with how this will affect the business.

Google asserts that it must modify its existing agreements with more than 1,100 device manufacturers and thousands of app developers, as well as introduce new licence agreements. Google will need to significantly alter the Android mobile platform, which has "been in place for the last 14¨C15 years," according to the company's filing.

The European Commission also fined Google in 2018 for placing unauthorised restrictions on manufacturers of Android mobile devices. The $4.3 billion fine imposed by the European regulatory body on Google was later contested by the company. According to Google, the CCI's decision is harsher because the Indian body's prescribed remedies are deemed to be "more sweeping."

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How Google imposes restrictions on smartphone users and makers allegedly?

Critics claim that Google imposes limitations, such as requiring the pre-installation of its apps (that are anti-competitive). while granting licences for its Android OS. The company went on to say that these agreements help to keep Android free.

CCI commanded Google to make it possible for Android users to uninstall first-party apps by October 2022. However, users of Android phones are still unable to remove pre-installed apps like Google Maps and YouTube from their devices.

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What do the industry experts say?

As cited in a Mint report, industry experts believe it would not have a major impact on Google. ¡°The fine itself is not particularly significant¡ªif you look at it, what CCI has fined Google is around 5% of what the European Union has penalised Google for its anti-competitive practices with Search and other products," said Prasanto K. Roy, a technology policy consultant.

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Having said that, Roy added that the ruling will impact Google¡¯s business model. ¡°A large part of the order is based on channelling the company¡¯s Search and other apps that it feeds through Android. The moment you restrict Search, that is a fairly significant diversion of revenue," Roy stated.

The decision will also have an effect on the commission Google receives from the Play Store, according to Trishee Goyal, a research fellow at the Vidhi Centre for Legal Policy, as cited in the same report. ¡°It also impacts how well their apps will be distributed. If their apps are facing more competition due to reduced commission from other apps, it will also impact revenue from that stream," she added.