Google pays for google play!

It is an undisputed fact that the Google of today is the biggest gatekeeper for the internet, and one of the wealthiest companies on the planet with a market cap exceeding $ 1.223 trillion. As a means to gain world dominance, Google has achieved today, it has been using a vast range of practices over the years to extend its monopoly for being a general search engine especially, in the Android Mobile device ecosystem. As a consequence, consumers are forced to accept google policies, privacy practices, and use of personal data without having any option to choose, thereby eliminating any competition from the other players with innovative business models trying to make an entry into the market.

India’s anti-trust regulator, prompted by the growing perception surrounding Google’s (mis)use of its dominant position with regard to Android phones where it required, that smartphone manufacturers, pre-install certain applications of Google such as the Google search engine, YouTube, Gmail, Google Maps, etc. slapped a penalty of Rs. 1337.76 Crores in the tech giant. Not only this but Google was also placed on the hook for another nine-figure fine of Rs. 936.44 crores for abusing its dominant position in the Play Store thereby allowing third-party payment apps and in-app purchases. This was the third hit faced by Google after losing the appeal over the European Union’s Anti-Trust ruling for placing unlawful restrictions on the manufacturers of Android mobile devices and mobile network operators to consolidate the dominant position of its search engine.

The Competition Commission of India (CCI) alongside the EU’s decision in light of eliminating the abuse of market dominance by Google laid out several measures to be implemented by Google in addition to a total fine of Rs. 2274 crores including but not limited to barring google from forcing smartphone manufacturers (OEM’s) to pre-install Google Apps and barring Google from entering into any agreements for the exclusivity of services.

The second ruling of the CCI within the same week issued a cease-and-desist order on the Google Payments Policy requiring mandatory and exclusive use of GBPS (Google Play’s Billing System) which denied payment aggregators/payment gateways access to the market for processing payments. This order makes India the second country after South Korea to direct Google to allow third party billing systems.

The ramifications of the cease-and-desist orders imposed by CCI barring Google from forcing OEMs to pre-install Google Apps could be twofold. On one hand, the decision opens up the floodgates for all start-ups in India to build competitive products against the tech giant and on the other hand, the ruling by CCI would permit new start-ups to enter the market and end the decades of the dominance enjoyed by Google. That being said, it may not have a huge impact on Google in the short term as the new App developers may not enjoy the reach that Google has created through years of dominance in the market which has made the end consumer accustomed to the uniform experience across devices integrated with the eco-system created by Google.

Complying with the CCIs rulings, Google has paused enforcement of its in-app billing system in India which the App developers were previously expected to comply with the Play billing policy by 31.10.2022. The Company is now expected to challenge the ruling and push for the stay of the orders on grounds, including but not limited to the fact that Android is a patented product of Google and as far as the issue of monopoly is concerned, Google has firmly claimed that both IOS and Apple Store are strong competitors to Android and Play Store.

If the orders of the Competition Commission of India restricting its anti-competitive practices continues to operate, it might open a door for plethora of security concerns for the Android users as the close coupling of Android with Play store has a security component which can cause concerns for users as the third-party apps shall have their own independent security implementations without the compliance of the security regulations of Google. While there might exist many concerns when it comes to third party apps and app stores, the same concerns might not exist for the third-party payment systems as the third-party systems function in a tightly regulated market with RBI regulations in place.

The technological landscape and ecosystem across the world can do well with a level playing field. In light thereof, the CCI orders can be seen as a step in the right direction towards a much-needed course correction against monopolistic and anti-competitive practices in India.

By - Arush Khanna & Prapti Allagh