“Raising the cost of mobile devices for Indians”, Google Spokesperson On $162 Million CCI Penalty
Big Silicon Valley companies are in hot waters with regulators around the world, mainly for abusing their market dominance and indulging in anti-competitive behavior. Recently, the Competition Commission of India (CCI) fined Google $162 million for just this, stating in its judgement “The competitors of these services could never avail the same level of market access which Google secured and embedded for itself through MADA (Mobile Application Distribution Agreement) Network effects, coupled with status quo bias, creating significant entry barriers for competitors of Google to enter or operate in the concerned markets,“.
Basically, with the CCI order, Google can’t force smartphone manufacturers to pre-install its apps on the OS, and neither stop users from uninstalling such apps. For example, if you have an Android device, you won’t be able to uninstall YouTube, like many other bundled Google apps on the OS. The CCI order also bars Google from incentivizing OEMs to have their apps bundled on the OS.
In the company’s first official response after the CCI order, a Google spokesperson stated in an email “The CCI’s decision is a major setback for Indian consumers and businesses, opening serious security risks for Indians who trust Android’s security features, and raising the cost of mobile devices for Indians.” Also adding, the company will “review the decision to evaluate the next steps.”
It isn’t clear how this order would open “serious security risks“, but it could potentially make Android phones a tab bit costlier in the country.
Back in 2018, EU regulators caught on to Google’s practice of offering the Android OS for free, albeit with a few strings attached, like including the company’s whole host of apps with the phone. The company had to find a way around the regulation, and Google simply proposed to charge smartphone manufacturers an unspecified fee for the Google apps that would come pre-installed on the phone.
It’s truly genius. Google, through actions the EU said broke its antitrust laws, got both smartphone users and makers hooked on Android and all the Google apps. Now that they’re addicted, Google is asking everyone to pay up to keep getting their Google fix. Sundar Pichai, Google’s CEO, hinted in July that Google might charge a fee for its Android software, which has been commonplace for Windows and other software operating systems.
Google will likely reappeal the order at a higher court, but the chances of a favorable outcome are slim, given the regulatory environment around the world. The entire point of not charging a licensing fee for Android, is to funnel users to Google’s own services and applications. The CCI has given Google sometime to comply with the order, and in-case they end up doing so, it could adversely affect the company’s business model in the country.
