The Competition Commission of India (CCI) on Tuesday has ordered an investigation into Google over allegations of the tech major abusing its dominant position in the Smart TV market in India.
CCI in its order said it prima facie opines that certain clauses of agreements entered into between Google and smart TV manufacturers amount to an abuse of Google’s dominant position in the market.
It said it's prima facie view that Google is dominant in the relevant market for licensable smart TV operating systems in India. As per its observations, the Android TV operating system is used in 7 out of the top 10 smart TV manufacturers.
The order to investigate follows complaints filed by lawyers Kshitiz Arya and Purushottam Anand who have alleged contravention of various provisions of Sections 3 and 4 of the Competition Act. The anti-trust regulator has also named Xiaomi India and TCL India as opposite parties in its order.
Making its observations on the case, CCI said Google enters into two agreements while giving out Android TV licenses. These are the Television App Distribution Agreement (TADA) and the Android Compatibility Commitments (ACC).
TADA gives Smart TV the right to offer Google’s proprietary apps such as Play Store, YouTube, etc, and the right to use the Android logo and other Android-related trademarks. However, for smart TV makers to be able to preinstall Google’s proprietary apps, they will have to commit to comply with the ACC for all Android-based devices manufactured/distributed/sold by them.
CCI noted that as per the agreement, to be able to preinstall any proprietary app of Google, e.g. Play Store, device manufacturers will have to preinstall the entire suite of Google apps.
While Google, in its submissions, has asserted that licensing of the Android operating system is not conditional upon signing of either of the two agreements, CCI said it is of the prima facie opinion that the Google Play Store is prima facie noted as a 'must have' app, in the absence of which the marketability of Android devices may get restricted. And so, these agreements too, become de-facto compulsory.
"In this backdrop, the commission is of the prima facie opinion that by making pre-installation of Google’s proprietary apps (particularly Play Store) conditional upon signing of ACC for all android devices manufactured/distributed/marketed by device manufacturers, Google has reduced the ability and incentive of device manufacturers to develop and sell devices operating on alternative versions of Android i.e. Android forks, and thereby limited technical or scientific development relating to goods or services to the prejudice of consumers in contravention of Section 4(2)(b) of the act," CII said in its order.
It noted that the ACC agreement prevents device manufacturers from being able to make, distribute or sell a device that can operate of a competing operating system, which means that developers of such Android operating system are denied market access resulting in violation of Section 4(2)(c) of the Act.
CCI said mandatory preinstallation of all the Google applications under the TADA agreement amounts to imposition of an unfair condition on the smart TV device manufacturers and thereby is in contravention of Section 4(2)(a)(i) of the Act.
"It also amounts to prima facie leveraging of Google’s dominance in Play Store to protect the relevant markets such as online video hosting services offered by YouTube, etc. in contravention of Section 4(2)(e) of the Act. All these aspects warrant a detailed investigation," CCI said. Section 4 of the Competition Act pertains to abuse of dominant market position.
The CCI has directed the Director-General, CCI's fact-finding body to investigate the same under provisions of Section 26(1) of the act, complete investigation, and submit a report within 60 days from the date of receipt of order.
CCI added that while Google has sought an opportunity for an oral hearing by video conference to present its arguments on the issues raised, CCI said it's convinced based on the information available on record that it merits directing an investigation. It has said that Google and the other parties can make further submissions before the DG during the investigation.
This is the second time CCI has ordered an investigation into the practices of Google. In November 2020, CCI ordered a detailed probe into alleged anti-competitive practices with respect to Google Pay and Google Play's payment system.
Also read: Vijay Shekhar Sharma: The cashless king