Google is planning a legal challenge to block a decision by India’s antitrust watchdog to change its approach to its Android operating system, worried it would restrict the way it promotes the platform, in direct view of the situation, officials familiar with the matter told Reuters.
The Alphabet unit has been fined $275 million (nearly Rs 2,300 crore) in two Indian antitrust decisions since last week – one for its policy of charging in-app commissions and the other for abusing its position on the Android Operating System market position.
The decisions come as Google faces an increase in antitrust investigations around the world. Last month, it suffered a significant setback when a European court upheld the 2018 ruling, saying it was primarily upholding a decision that the company had imposed “unlawful restrictions on makers of Android mobile devices.” Google plans to appeal the decision, where it faces a record fine of $4.1 billion (about Rs 33,800 crore).
The Competition Commission of India’s (CCI) ruling against Android, despite involving a smaller fine of $162 million (nearly Rs 1,300 crore), has Google concerned as it seeks a broader remedy.
Google is concerned that the CCI decision could increase regulatory pressure in other jurisdictions and plans to file a legal appeal within weeks to block enforcement of the antitrust order, one of the officials said.
Google declined to comment on its legal plans and reiterated its statement last week that the CCI order “is a major setback for Indian consumers and businesses, poses a serious security risk and raises the cost of mobile devices for Indians. “
Google’s lead counsel, Abhishek Manu Singhvi, tweeted Wednesday that the “inherent and patent flaws” in the order made the challenge inevitable and likely to succeed.
Google has faced criticism globally that it licensed its Android operating system to smartphone players but signed restrictive anti-competitive agreements. The US company insists that Android creates more choices for everyone, and such agreements help keep the operating system free.
In the European Commission’s case, for example, its antitrust body ruled in 2018 that Google had abused its dominant position by forcing manufacturers to pre-install two of its apps – Google Search and the Chrome browser – along with Google Play Store on Android devices.
One of the officials said India’s order is worrying as it further imposes restrictions on the wider range of Google apps – “Play Store licensing must not be tied to pre-installation of Google search services, Chrome browser requirements”, YouTube, Google Maps, Gmail or any other application from Google,” CCI noted.
Faisal Kawoosa, the founder of Indian research firm Techarc, said such pre-installation restrictions could force Google to consider different revenue models, such as charging device makers Android licensing fees in India, as it does in Europe.
“The CCI direction hits the heart of Google’s Android revenue model – which relies on volume gaming with a larger user base, and multiple avenues for monetization,” Kawoosa said.
Counterpoint Research estimates that 75% of 550 million smartphones in Europe run on Android, while 97% of India’s 600 million devices run on Android.
Google is also concerned that the CCI has ordered it not to impose any restrictions in India on so-called “sideloading,” the practice of downloading apps without using an app store, and allowing other app stores to be available on its Play Store, two officials said.
However, these are expected to boost the prospects of domestic rivals such as Indus App Bazaar, which offers thousands of apps in English and local languages. Indus said this week that the order “will bring more choice and innovation to Indian developers”.