Right to choose

Competition Commission should look at EU's fine on Google

Last week, the European Commission (EC) fined Google a record €4.3 billion for abusing its dominance in search by illegally tying together its search facilities and other mobile apps with the Android mobile operating system. Google has been given 90 days to change these business practices. The tech giant says it will appeal the decision. This follows another fine of $4.2 billion the EC levied in 2017 for giving preference to Google’s own comparison shopping services in its search results. These antitrust actions are designed to ease access to the Android mobile operation software (OS) for independent developers, who may wish to develop new apps to perform functions similar to the Google apps. Microsoft faced similar punishments in the 1990s, when it bundled its in-house browser, Internet Explorer, with the Windows OS. India's Competition Commission would do well to follow this case and consider carefully the principles upon which the EC's actions are based. Like the European Union, India, too, has a diverse, multi-ethnic, multilingual market connected by a single currency. Moreover, the Indian smartphone environment is dominated by the Android-based OS, just like the EU.

The Android OS is open source. Any phone manufacturer may load the Android OS on their devices. However, the bulk of apps developed for Android are only available through the Google Play store, which makes it a commercial necessity for phone-makers to preload the Google Play app. But if they load Google Play, they are bound by agreement to also load the Chrome browser, Google Search, and other Google apps and to display the respective icons prominently. In effect, this means that Google apps become the default and consumers are denied “the benefits of effective competitive” and rivals cannot “innovate and compete on merits”, according to the EC judgment. There is a certain amount of hairsplitting involved. Google could continue to load its own apps by default into the Pixel range of phones, which it brands and manufactures itself. Similarly, Apple, which sells its iPhones as integrated units run on iOS with bundled apps, can continue with its business practices of bundling integrated software and apps. But Google will have to review its licensing agreements with phone manufacturers which use Android, and allow them more latitude in terms of bundling Google apps with Android. It might also have to offer users the option to delete apps by Google and replace these with alternatives without affecting the efficiency of the phone.

Going by the example of China, this move may indeed lead to higher competition. Paid apps via Google Play are not available in China. Hence, many Chinese phones running on Android variations don't have Google Play, Chrome and other pre-installed Google apps. As a result, Chinese developers have built their own search engines and browsers, which are arguably as efficient as the Google variations, and probably, more tuned to specific localised needs. In practice, the tech giant may drag its feet but the principle of easing access to the Android OS is important. The Competition Commission could consider emulating the EC to induce Google to open up the desi Android environment. This would stimulate local app developers and it might provide an especially big boost to app developers in vernacular languages.