Can Google deal with regulatory challenges in India?

Having faced regulatory challenges globally, Google is currently confronting penalties in India. In October 2022, the Competition Commission of India (CCI) passed two orders against Google regarding its Android ecosystem and Play Store policies. The orders imposed penalties against Google for abusing its dominant position and directed it to modify its policies.

The orders pleased Indian domestic startups, like local app store developer Indus App Bazaar who praised the CCI’s decision and said its directions would create a level playing field and increase choice for users. The CCI directions would make markets more contestable and competitive, allowing Google’s rivals a level playing field.

The CCI directed the search giant to take measures such as allowing smartphone users to uninstall certain apps and letting them use their preferred search engine. The antitrust watchdog also levied a second fine of about 9.36 billion rupees for alleged abuses by Google relating to its mobile app store.

Google challenged the orders and sought immediate and complete stay from the NCLAT. In January, its attempt to block the regulators’ decision was lost. In line with the imposed rules, Google says it will let smartphone makers “license individual Google apps” to preinstall on their devices as well as “introduce changes for partners to build non-compatible or forked variants.” However, the company says it will continue to “respectfully appeal certain aspects of the CCI’s decisions.”

On March 30^th this year, a fine of around US$160 million was upheld, but four of 10 antitrust directives were set aside. According to Union IT Minister Rajeev Chandrasekhar, the matter is serious and necessary action will be taken. “We have thought through it. You will see it in the coming weeks. Certainly it’s not something that we will leave and push under the carpet.”

India’s government plans to take action against Google for having abused its position by indulging in anti-competitive practices. The animosity is bad news for Google because 97% of India’s 620 million smartphones run on Android, and the company counts India as a critical growth market.

The Internet and Mobile Association of India appointed co-founder and chief executive of Dream Sports Harsh Jain as the new chairperson of the association. Rajesh Magow, co-founder and group chief executive of MakeMyTrip, will now serve as the Vice Chairman of IAMAI, replacing Meta’s Shivnath Thukral. Times Internet’s Satyan Gajwani has been appointed as the industry body’s treasurer, taking over from Google India head Sanjay Gupta.

The appointments follow numerous Indian entrepreneurs stating the IAMAI had lost credibility because of the positions it had adopted on regulations and policies drafted by New Delhi.

Anupam Mittal of Shaadi.com claimed that IAMAI’s viewpoints, which largely echoed those of Big Tech, indicated that the influential lobby group had become a “mouthpiece” of American tech giants.

Google criticized India’s regulations

Google accused Indian regulators of copying the EU’s language in an antitrust ruling—but observers say there’s nothing suspect about regulators following in each other’s footsteps. Google said that the CCI had copied parts of the European Commission’s 2018 decision about the same issue. That’s totally allowed though – inconvenient as it may be to the company.

Google’s statement on the matter didn’t include the issue with the “copy-pasting”, instead arguing that Android has created more choice for everyone, and the ruling presents a major setback for our Indian users and businesses”.

What can be done?

It might not be popular with Google, but the changes in India are similar to what’s implemented in Europe. The behavioural remedies imposed by the CCI are covered by the European Union’s Digital Markets Act (DMA).

The company needs to weigh up what will come at a greater cost: complying with the CCI’s demands or losing the Indian market. Since it already complies with restricted liberties in Europe, perhaps it shouldn’t be such a contentious matter in India.

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