SUMMARY
With pre-installation of Google apps, Google reduces the ability and incentive of OEMs to develop and sell devices operating on alternative versions
Due to Google’s anti-competition agreements, Google’s competitors such as Amazon, have not been able to enter the market for licensable operating systems for TVs
CCI has directed the director general to probe the case and submit the report in 60 days
After Google Search, payments and Android OS, Google has once again mired into another controversy. The Competition Commission of India (CCI) has now prima facie held Google’s Android TV in contravention of the various sections of India’s Competition Act.
Hearing the case filed by two individuals advocates Kshitiz Arya and Purushottam Anand, the CCI has ordered an investigation and has asked the Director-General to investigate and submit the report within 60 days.
The commission in its investigation order maintained that by making pre-installation of Google’s proprietary apps (particularly Play Store) conditional upon signing of Android Compatibility Commitment (ACC) for all android devices manufactured/distributed/marketed by device manufacturers, Google has reduced the ability and incentive of device manufacturers to develop and sell devices operating on alternative versions of Android.
The Allegations
It has been alleged that the internet giant has been abusing its dominant position in the TV OS market by entering into anti-competitive agreements with TV OEMs such as Xiaomi and TCL which are also named as parties in the case.
Antitrust Lawyers Arya and Anand have alleged that due these agreements, smart TV OEMs have decided to refrain from selling TVs with competing forked android based operating systems. As a result, Google’s competitors in this industry (such as Amazon), have not been able to enter the market for licensable operating systems for TVs. Due to the very nature of these agreements, Google’s share for licensable smart TV device OS is likely to be in the range of 75% and above.
The watchdog observed that prima facie, Google violates various provisions of Section 3 and 4 of the Competition Act.
Section 3(1) of the Competition Act, 2002 asserts that — no enterprise or association of enterprises or person or association of persons shall enter into any agreement in respect of production, supply, distribution, storage, acquisition or control of goods or provision of services, which causes or is likely to cause an appreciable adverse effect on competition within India.
Similarly, Section 3(3) states that any agreement entered into between enterprises or associations will be termed anti-competitive if it controls production, technical developments, investment or provision of services. While Section 4 restricts companies from abusing its dominant position in the market.
Google’s Submission
In its response to the CCI, Google has filed its submissions in two parts — confidential and non-confidential. Google has called these allegations unsupported by evidence, factually incorrect, and based on material legal misconceptions.
The internet giant averred that Google makes Android Open Source Project (AOSP) license available to any third parties under an open source license, which does not oblige (or entitle) licensees to preinstall any proprietary Google apps, app store, or services. Google has claimed that the free and open-source AOSP has facilitated development of successful Android Forks, including FireOS by Amazon.
Third parties, such as OEMs and operating system developers, can and do modify AOSP to produce their own variants of the Android TV platform, and produce differentiated Android devices.
It is Google’s Android TV ‘launcher’ under an agreement namely, Television App Distribution Agreement (TADA), a separate and optional agreement that enables OEMs, on a device-by-device basis, to provide users with a set of pre-installed Google apps. OEMs can decide whether to install Android TV and the accompanying Google apps (including Play) on some, all, or none of their devices.
Google A Serial Offender Of Law And Order?
This is not the first time that the CCI has prima facie found Google violating India’s antitrust laws. The Commission has ordered such investigations in the past too. Last year, CCI had opened an investigation into Google for allegedly abusing the dominant position of its app store to promote its payments service. The company was allegedly abusing its dominant position to force app makers to exclusively use its billing system for in-app purchases and for bundling the search giant’s payments app with Android smartphones sold in the country.
In 2018, CCI had even slapped a fine of INR 136 Cr on Google for unfair business practices in the Indian market for online search. The order was later stayed by the NCLAT.
In 2019, the European Union had slapped a fine of $5 Bn for Google abusing its market dominance since 2011 with practices such as forcing manufacturers to pre-install Google Search and its Chrome browser, together with its Google Play app store on Android devices. France’s data protection agency, the National Data Protection Commission (CNIL) announced a fine of €50 Mn ($57 Mn) on Google citing the European Union’s new General Data Protection Regulation (GDPR). After studying the onboarding process for a new Android smartphone user, the CNIL had said that the information provided by Google is “not clear nor comprehensive.” Early this year, Google had to pay $270 Mn to CNIL as part of the settlement agreement.
