2023 In Review: A Year When Digital Goliath Google Met Its Adversaries In India

2023 In Review: A Year When Digital Goliath Google Met Its Adversaries In India

SUMMARY

Google India hit a rough patch in 2023 as regulatory skirmishes and showdown with Indian startups cast a gloomy shadow over the company

Amid a concoction of troubles bringing negative headlines for the big tech giant, Google continued to scale its digital ambitions as it rolled out GenAI offerings in 2023

With Indian general elections scheduled in 2024 and the emergence of new threats like deepfakes, the spotlight is now on Google as it looks to manoeuvre the new year

A landmark fine by the Competition Commission of India (CCI) on Google in late 2022 set into motion a series of events that echoed well into 2023. The domino effect led to a turbulence that hit Google’s ship, a force to reckon with and a digital juggernaut. 

Emulating its global operations, 2023 turned out to be a tumultuous year for the big tech major in India as well. The CCI penalty emboldened Indian startups to take the company to courts and even paved the way for the homegrown ecosystem to wrest control of a key industry body (IAMAI) from Google.

Piling on top of these issues were other anti-competitive cases brewing in the news aggregation and the smart television space. 

Besides, as a flurry of legislation, centred on the country’s digital ecosystem, took shape this year, Google found itself in the crosshairs of the government. Be it rap from authorities for failure to crack the whip on fake news or the emergence of deepfakes, the year turned out to be a trying time for the big tech giant.

Macroeconomic headwinds too hit the company as layoffs brought bad press for the big tech giant.

Notwithstanding these challenges, Google continued to focus on India, its biggest market globally in terms of users. 

From chief executive officer (CEO) Sundar Pichai’s bonhomie with Prime Minister Narendra Modi to moving some of the production of Pixel smartphones to India, Google left no stone unturned to tout its India push. 

The year also saw Google bolster its fintech ambitions while rolling out new AI offerings for its Indian audiences. While 2023 indeed was, in some sense, a mixed bag for the company, unease prevailed among the company’s top leadership over regulatory strife and legal cases stuck in limbo.

Google Caught In The Great Indian Legal Limbo

As the competition watchdog issued a landmark antitrust judgement against Google in October 2022, little was known that it would stir up a big storm for the company. 

The CCI slapped two separate fines, totalling over INR 2,200 Cr, on Google for abusing dominance in the Android devices market and over its Play Store policies. It also directed the US-based major to undertake sweeping reforms to its operations in the country. 

Refusing to take the order lying down, the company appealed the decision before the National Company Law Appellate Tribunal (NCLAT). 

As cases dragged on, Google was forced to change course and instituted a slew of changes to India operations. It made some changes to its agreements with original equipment manufacturers (OEMs) and even announced a new user choice billing system (UCBS), which slashed developer commissions to 11-26%.

However, as Google began rolling out new policy changes to comply with the CCI rules, it met an unexpectedly tough adversary — Indian startups. 

First on the menu were public statements by Indian startup founders, trashing the new billing policy and equating it with British-era ‘Lagaan’. Some even termed Google a threat to the country’s startup ecosystem. 

What followed was Indian startups banding together to file cases against Google’s UCBS in Delhi High Court and Madras High Court. The homegrown players even approached the NCLAT and other stakeholders to pitch their case against the new policy.

As this saga played out, many founders were irked by the silence of industry body Internet and Mobile Association of India (IAMAI) on the matter. Consequently, the startups trained their guns on the industry body, which, as per many founders, was controlled by big tech executives. 

The aftermath saw Indian founders participate in huge numbers in the IAMAI’s elections and wrest its control from Google representatives – a small win for the Indian startup ecosystem.

In the middle of all this, it was the regulatory standoff that seemed to be the biggest trouble in Google India’s paradise.

Google’s Regulatory Pitfalls In India

A recurring theme of Google’s operations in India has been its behind-the-scenes, if not always public, skirmishes with the government. As the government undertook the overhaul of key digital laws in 2023, Google found itself in the middle of the action. 

While the amended IT Rules brought the safe harbour protections into question, the Telecommunication Bill hinted at the possibility of regulation of its OTT communication apps. The Digital Data Protection Act proposed an elaborate set of homework, hefty fines and additional compliance burden for the Sundar Pichai-led company.

The emerging threats such as deepfakes as well as misinformation, ahead of 2024 general elections, has also put the company in the crosshairs of the union government. 

The emerging threats such as deepfakes as well as misinformation, ahead of 2024 general elections, has also put the company in the crosshairs of the union government. 

In a bid to tide over this, the company has largely resorted to its time-tested strategy of engaging with authorities behind closed doors, partnering with the Centre on a slew of initiatives, and emboldening its Make in India push. 

Be it the production of Pixel smartphones in India or launching accelerator programmes for Indian startups, in partnership with MeitY, Google pitched itself as a force dedicated to the cause of the Indian digital economy. 

Meanwhile, the company continued to shore up its fintech ambitions, looking to capitalise on the burgeoning number of Indians joining the digital fold. 

The India Ambition Scales Up

Google continued to heavily scale up operations to capture a bigger pie of the Indian digital economy, which is projected to soar to a market size of $1 Tn by 2025

Diversifying from offering mere digital payments services, the big tech major forayed into the financial services segment. In partnership with Indian banks and startups, Google Pay, starting 2023, began to offer merchant credit lines and sachet loans for consumers.

With an eye on accelerating its fintech growth, Pichai also announced that the company would set up its global fintech operation centre at the GIFT City in Gujarat

Capitalising on GenAI, the flavour of the season, Google announced a spree of AI-focussed launches this year. Be it Bard or visual search, the tech giant rolled out a host of AI-led products and services for its Indian users even as competition intensified from Sam Altman-led OpenAI. 

Meanwhile, it continued to feel the heat of the global economic meltdown that unfolded in 2023. As a result, Google undertook a cost cutting exercise to streamline operations which resulted in axing of more than 450 jobs in India

The Mountain View-based company also shut down and announced the discontinuation of a slew of products and services, such as Google Podcasts, Google Stadia, and Google Jamboard, to focus on actual money-minting products. 

In India, YouTube also shut down its live social commerce app Simsim,

In India, YouTube also shut down its live social commerce app Simsim, just two years after the streaming giant splurged millions of dollars to acquire the Indian startup. 

What 2024 Holds For Google?

After a turbulent 2022 and 2023, Google has work cut out for itself in 2024. With general elections around the corner, Google could be in the spotlight as apprehensions grow over misinformation and negative use of generative AI.

While its legal troubles and standoffs with government authorities are expected to continue well into next year, the company could be hoping for some relief from Indian courts as it charts its path ahead in India.

The company will also continue to pump millions of dollars to roll out GenAI offerings, especially its GPT-4 rival Gemini. The suite of AI products will largely cater to consumer-facing products while it straddles potential regulations for the emerging technology. 

The world is also expected to return to sanity as macroeconomic pressures ease, paving the way for healthier revenues for the big tech giant. While the antitrust rulings are expected to continue, the company will continue to scale up its presence in India, focussing more on vernacular media and tapping into the growing Indian population that wants to access the internet in their own language.

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