google: CCI order in Google case may have financial implications for local developers

The recent order by the Competition Commission of India (CCI) in the Google case may appear developer-friendly, but in practice, it may have a practical and financial impact on the developers, especially the startups, according to legal experts.

The CCI fined Google Rs 936.44 crore on October 25 for abusing its dominant position with regards to its Play Store Billing and payment policy, a few days after the regulator slapped a fine of Rs 1,338 crore for abusing its dominant position in multiple markets with its Android mobile operating system (OS).

According to Gowree Gokhale, Partner, Nishith Desai Associates, from the order, at least, it does not appear that there was enough evidence on the effects of Google’s practises on end consumers and the Android ecosystem.

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“In the absence of anti-fragmentation obligations, if multiple incompatible Android OS versions are developed by OEMs, then the developers may have to customise their apps for each version. This may delay market entry and enhance the cost,” Gokhale said.

This, in turn, may further contribute to the disparity of opportunity between small and large developers.

“The overall value of the Android ecosystem as a whole may get eroded. It seems highly improbable that baseline compatibility standards across such fragmented ecosystems would emerge, based solely on market forces,” said Gokhale.

Google has been given a deadline of 30 days to provide the requisite financial details and supporting documents in the CCI order.

Hit by two back-to-back fines by the CCI, Google said it was reviewing the decision to evaluate the next steps.

In a statement, Google said that Indian developers have benefited from the technology, security, consumer protections, and unrivalled choice and flexibility that Android and Google Play provide.

“And, by keeping costs low, our model has powered India’s digital transformation and expanded access for hundreds of millions of Indians. We remain committed to our users and developers and are reviewing the decision to evaluate the next steps,” a Google spokesperson said.

According to Gokhale, one of the benefits of the anti-fragmentation obligations placed on the OEMs by Google is standardising security implementation within the overall Android ecosystem, across all devices.

“In the absence of this obligation, OEMs may develop an OS version that is not secure or interoperable with other versions. Consumers may not be well aware of the differences in the OS versions and may simply rely on the Android brand,” she emphasised.

She said that since the personal data of users gets collected across various apps, it is very important that all devices have equal security standards. That also helps consumers have a wider choice of devices.

“The CCI does not seem to have considered this aspect in detail at all,” Gokhale said.


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