Explained: Why India Imposed Consecutive Hefty Fines On Google And What's Next

Google's woes in India seem to be getting worse. Last year, India's antitrust body slapped two back-to-back fines on the US-based tech giant for exploiting its market monopoly through its Android ecosystem.

Just yesterday, Google told a tribunal that the Competition Commission of India (CCI) copied European Union's landmark 2018 ruling that would cost the company $4.3 billion (4.1 billion euro) for its unlawful restrictions on Android manufacturers.

Reuters

Why was Google fined the first time?

India had a similar concern. In October, the CCI fined Alphabet Inc's Google Rs. 1,337 crore ($161 million) for "abusing its dominant position in multiple markets in the Android mobile device ecosystem."

CCI imposes monetary penalty of ? 1337.76 crore on Google for abusing dominant position in multiple markets in the Android Mobile device ecosystem.
Press Release: https://t.co/sXXA0RvK51#Antitrust #AntitrustOrder #antitrustlaw #Google #CCI pic.twitter.com/FE5Yh8PWr4

¡ª CCI (@CCI_India) October 20, 2022

This first fine was about Android OS that is widespread across mobile devices in India - with about 97% of all 600 million devices in India running on Android.

Also read: Google Claims India Copied European Union's Antitrust Ruling 'Word-For-Word'

Reuters

Manufacturers (also called OEMs) simply build devices that run on Android; governed by Mobile Application Distribution Agreement (MADA). "MADA assured that the most prominent search entry points i.e., search app, widget and Chrome browser are pre-installed on Android devices, which accorded significant competitive edge to Google's search services over its competitors," the CCI said in its first statement on October 20, 2022.

"Further, Google also secured significant competitive edge over its competitors, in relation to its another revenue-earning app i.e. YouTube in Android devices. The competitors of these services could never avail the same level of market access which Google secured and embedded for itself through MADA... create significant entry barriers for competitors of Google to enter or operate in the markets concerned," the CCI added at the time.

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Second fine in the same week

Just a few days later, the CCI slapped another fine on Google, stating that the company was using its payments system to maintain its monopoly and to prioritise its own services. This Rs. 936 crore ($113 million) fine directed Google to "not restrict app developers from using any third party billing/payment processing services."

Case Nos. 07 of 2020, 14 of 2021 and 35 of 2021

CCI imposes a monetary penalty of ? 936.44 Crore on Google for anti-competitive practices in relation to its Play Store policies.
Read the full order here: https://t.co/GDR820ffYg
Press release: https://t.co/7HEPJeHVK3#Antitrust pic.twitter.com/TbTa6vbCXl

¡ª CCI (@CCI_India) October 25, 2022

Also read: Google Fined Rs. 1,337 Crore In India For 'Abusing Dominant Position'

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According to CCI's statement from October 25, 2022, Google forced its in-app payment system on apps within the Android ecosystem. This provision would allow app developers operating in India to use any third-party billing or payment services for in-app purchases as well as for standalone app purchases. Google's commissions for purchases made on Android can be as high as 30% and antitrust agencies around the globe are now cracking down on such practices that slyly create advantage for tech behemoths.

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What does Google say?

But Google's not sitting back and taking the beating. While India's National Company Law Appellate Tribunal (NCLAT) asked Google on January 4, 2022 to pay 10% of the CCI's first fine - quashing Google's hopes of getting it thrown out - the tech giant claims that the CCI "failed to conduct an impartial, balanced, and legally sound investigation."

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While the tribunal has agreed to consider Google's appeal against the CCI, no immediate relief has been granted, and it now looks more likely that the company would have to cough up the fine amount. The next hearing will take place in February.

Also read: India Fines Google Second Time In A Week, Company To Pay Rs. 936 Crore Penalty

India's pushback against the monopoly of US tech giants comes amid global challenges to the hegemony of very few companies that control almost all of the tech market and services. Google, on the other hand, believes that CCI's decisions "present a major setback for our Indian users and businesses" while alleging the watchdog of copy-pasting EU's order against the company.

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In the appeal, Google stated that while the CCI found infringements related to the Google search app, Chrome browser, and Youtube, its order "extends beyond" these services. Regardless, India remains Google's biggest market, and it only makes sense that India would crack down on monopolistic practices that stifle home-grown competition in the smartphone industry.

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