Google loses bid to block Indian Android cartel ruling in major setback

Google loses bid to block Indian Android cartel ruling in major setback

  • India’s top court refuses to block Android antitrust ruling
  • Google may need to review Android business model in India
  • Court extends Indian order’s implementation date by one week
  • Google has said the order in India could halt Android growth

NEW DELHI, Jan 20 (Portal) – Google on Thursday lost its battle in India’s Supreme Court to block an antitrust order, in a major setback that will force the US tech giant to abandon the business model of its popular Android Operating system fundamentally change growth market.

The Competition Commission of India (CCI) ruled in October that Google, owned by Alphabet Inc (GOOGL.O), is abusing its Android dominance and asked it to lift restrictions on device manufacturers, including those related to pre-installation of app. Google was also fined $161 million.

Google challenged the decision in the Supreme Court, saying it would harm consumers and its business. It warned that the growth of the Android ecosystem could stall, forcing it to change agreements with more than 1,100 device makers and thousands of app developers. Google also said “no other jurisdiction has ever requested such far-reaching changes”.

A three-judge panel at the Supreme Court, which includes India’s chief justice, delayed implementation of the Jan. 19 CCI guidelines by a week but declined to block them.

“We are not inclined to interfere,” Chief Justice DY Chandrachud said.

During the hearing, Chandrachud told Google, “Look at the kind of authority you wield over dominance.”

Counterpoint Research estimates that around 97% of India’s 600 million smartphones run on Android. Apple (AAPL.O) only has a 3% stake.

India’s top court asked a lower court, which is already hearing the matter, to rule on Google’s challenge by March 31.

Google did not respond to a request for comment.

Google licenses its Android system to smartphone makers, but critics say it imposes restrictions like mandatory pre-installation of its own apps, which are anti-competitive. The company argues that such agreements help keep Android free.

Faisal Kawoosa, founder of Indian research firm Techarc, said the Supreme Court ruling means Google may need to consider other business models in India, such as charging startups an upfront fee to grant access to the Android platform and its Play Store .

“Ultimately, Google is for-profit and needs to look at actions that will make it sustainable and fuel the growth of its innovation,” he said.

Android has been the subject of various investigations by regulators around the world. South Korea has fined Google for blocking customized versions of it to limit competition, while the United States Department of Justice has accused Google of making anti-competitive distribution agreements for Android.

In India, the CCI has ordered Google that the licensing of its Play Store “must not come with the requirement of pre-installation” of Google search services, the Chrome browser, YouTube or other Google applications.

Google was also instructed to allow its apps to be uninstalled by Android phone users in India. Currently apps like Google Maps and YouTube cannot be deleted from Android phones if they are pre-installed.

Google was concerned about India’s decision as the moves are seen as more far-reaching than those imposed in the European Commission’s 2018 ruling, when Google was fined for imposing what the commission called unlawful restrictions on Android mobile device makers . Google has appealed the record $4.3 billion fine in that case.

In Europe, Google has made changes including allowing Android device users to choose their default search engine from a list of providers.

Google also argued in its legal filings viewed by Portal that the CCI’s investigative unit “copied extensively from a European Commission decision and used evidence from Europe that was not examined in India.”

N. Venkataraman, a government attorney representing the CCI, told the Supreme Court, “We did not cut, copy, and paste.”

Reporting by Aditya Kalra, Arpan Chaturvedi and Munsif Vengattil; Additional reporting by Diane Bartz and Supantha Mukherjee Editing by Jason Neely, Vin Shahrestani and Mark Potter

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