Worried Google brass flags CCI orders a ‘priority’ issue

Google has flagged as “priority” the verdict by India’s antitrust regulator that its Android Operating System had abused its dominant position, people aware of the matter told ET, as the country is one of the largest markets for the US-based search giant.

Google is currently working on a strategy which may include challenging the two orders by the Competition Commission of India (CCI), they added. The verdicts may hurt the developer base in the country since it would have to develop apps with different specifications for different app stores.

“The CCI ruling is very concerning, not just for the security risks that come with sideloading (of apps) but also the risk that the order makes vis-à-vis forked versions of Android,” one of the people said.

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Sideloading refers to downloading apps outside of app stores using the APK file. Google has put in place a structure where the open-source ecosystem has a baseline level of compatibility which lowers costs for developers to get their apps out on Google Play Store.

“If it now has to enable forked version of Android, we’re actually going back to the early 2000s world where the ecosystem was super fragmented and developers are priced out of building apps for the ecosystem because there are so many different versions that they have to build for,” the person added. This kind of ecosystem will end up like what is currently seen in China, wherein there are various Android forks, and the ecosystem is vastly fragmented, with several “tons of user vulnerabilities with security” because there is no central place where users are protected.

“There’s no compatibility (in China),” the person said. “There’s no security to ensure that when users are downloading and engaging with apps, there’s some baseline security. That’s what Google is worried about when it comes to what has been asked of them to do in the CCI ruling and is trying to figure out how best to respond to that.”

Google was not immediately available for comment.

On October 20, CCI imposed a fine of 1,337.76 crore on the search giant for abuse of its dominant position in multiple markets through the Android OS. Five days later, it imposed a further penalty of 936.44 crore for flouting multiple provisions of the Competition Act, such as making its in-house payment and billing system mandatory for paid apps and in-app purchases on its Play Store.

CCI in its order also asked Google to allow listing of other app stores on the Play Store and not place any restrictions on sideloading, including showing warnings to users. The competition watchdog also asked Google to not deny developers of Android forks access to Play Services APIs.

If a television is one fork, a phone another and a pair of speakers is a third fork, there is no guarantee that they will be able to talk to each other, the person quoted said earlier. As India increasingly gets into the internet of things, industry executives said incompatibility will be a challenge.

“The CCI order places the onus of interoperability on Google,” another person said. “It has asked Google to make all its apps interoperable for all forks, but the same expectation is not on the makers of these forks – (that) there should be seamless communication between each of them.”

The industry, especially the startup ecosystem, has welcomed the orders, arguing that it will help the domestic players.

“The ill-effects of being held to tech/media/search/maps/OS/app store platforms being controlled by foreign countries/companies should be obvious,” said Rohan Verma, CEO of MapmyIndia, which competes with Google Maps. “Calculations show that India has easily lost $200-$300 billion directly and indirectly probably another $200-$300 billion due to its indigenous ecosystem being suppressed by anti-competitive activities as detailed very comprehensively and accurately by CCI.”

The CCI verdicts have come at a time when Google is embroiled in similar investigations by the United States, the European UnionGermany and Japan.

On whether Google would be concerned about other regulators taking a similar stance, sources told ET that the CCI ruling was “so extreme” that they do not expect other regulators to follow suit.

“Other regulators have looked at the same questions and they didn’t go this far (in terms of restrictions),” another person said. “Other regulators will look at this and think that this creates more problems than it solves. It introduces more issues than it solves, but it does create serious issues for Indian users. Since India is an important market for Google, the company will do their best to comply.”

The company will also try to have a dialogue with the new CCI chief when the person is appointed, to assuage some of its concerns, the person added.

ET reported earlier this month how antitrust regulators in Australia as well as Germany were among those “following recent action by the Competition Commission of India against Google,” signaling increased global attention in policy rulings that challenge the dominance of large technology corporations by India, the world’s largest data market.

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